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Mixed Messages
Two weeks ago, the Federal Reserve decided to hike rates again. This was no surprise. What was surprising, however, was the subsequent drop in long-term rates and the further flattening of the yield...
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Tariffs Won’t Kill the Market; The Fed Will
“Always tell the truth.” In addition to being number eight on the Top 10 list of things we should always do, being truthful is just a great way to avoid trouble in life. You never have to remember what...
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Is Inflation Finally Moving Higher?
Stock market volatility was front and center last week, mainly because of President Trump’s proposed tariffs and China’s retaliatory threats. Treasury bond volatility, on the other hand, hasn’t been as...
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Is Inflation Moving Higher? Does It Matter?
Treasury yields climbed higher a couple weeks ago, while Treasury volatility really took a leap. The long-term Treasury yield didn’t quite make it to the March high of 3.23%, but the 10-year Treasury...
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Japan’s Monumental QE Has Done NOTHING for Its Inflation or Growth
The biggest debates I have are with gold bugs. They believe endless money printing will inevitably lead to hyperinflation and that will push the gold price over $5,000 an ounce while sinking the dollar...
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Yields Are Crashing!
When long-term Treasury yields started to climb mid-month and closed at a high of 3.24%, I didn’t see fundamental evidence to suggest that higher inflation was on the way. Recent economic and market...
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So… What Will the Fed Do Next?
All signs pointed to a quarter-point rate hike coming from the Federal Reserve’s monetary policy arm, the Federal Open Market Committee (FOMC). That’s exactly what we got after its two-day meeting...
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Trade Wars, Rate Hikes, and a Whole Lot of Maybes
Last week, Federal Reserve Chair Jerome Powell dropped a couple of surprises on Fed watchers. What didn’t come as a shock was the quarter-point hike to the overnight federal funds rate. Markets were...
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Are You Ready for Some Bonus Fireworks?
I hope you all had a safe, fun Independence Day. But get ready for some fireworks after the fourth! Market volatility over the past few weeks has been all about trade, specifically China and the U.S....
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The American Illness
Our government’s debt is approaching $21 trillion. The stimulus packages, tax cuts, and QE have driven it to new highs. It didn’t start with Trump though, despite him claiming to have initiated the...
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Who Says You Can’t Have a Trade War Without Volatility?
Stocks rebounded nicely on Monday, despite the burgeoning trade war between the U.S. and China. Nothing’s changed on that front. But no news was apparently good enough for a market bounce. If the stock...
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Central Banks Do the Tighten Up
The Bank of Japan (BoJ) shook the global credit markets last Tuesday. Even Treasury bond investors perceived the BoJ’s tweaks to its monetary policy as a signal that the transition away from...
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Will a Little Housing Bend Break Towards Big Trouble?
The Federal Reserve’s statement from its last meeting and policymakers’ subsequent comments sum up the current situation as follows: U.S. economic growth has been strong, unemployment is low, and...
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A New Way to Lighten Our Health Care Load
The Bureau of Labor Statistics (BLS) recently reported that headline inflation rose 0.2% in July and is 2.9% higher than last year. Core inflation, excluding food and energy, also rose 0.2% last month,...
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Capitalism Isn’t the Problem… and Neither Is Democracy
Many would assume that the Agricultural Revolution back near 10,000 BC was the greatest innovation and breakthrough in human history. Or the invention of the wheel back around 3500 BC. Or the creation...
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Guided By Stars? Really?
If there were any lingering doubts the Federal Reserve intends to boost its benchmark interest rate by another quarter point next month, Chair Jerome Powell settled them last Friday. Powell, during his...
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Wages Are (Finally) Blowing Up
Summer doesn’t officially end until September 21. But we’re more than a week beyond Labor Day, and business is business. And things were booming last week. Ignore Woodward’s latest “tell-all,” that...
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Dow 30,000 or Dow 6,000?
The Trump rally into January 2018 looked like the classic final blow-off top. It had been advancing in a clear channel, then it broke above that in a classic “overthrow” pattern, followed by a sharp...
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Trump, Treasurys, and You
The thing about politics is nobody knows anything. We learned that in November 2016. There’s a particularly high degree of “know-nothingness” in Washington these days. That creates a lot of...
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The Fed’s Newest Double Standard
Collectively, we just got screwed again, and I bet most people didn’t even know it. It happens so many times, particularly at the hands of the Federal Reserve, it’s hard to keep track. A new bank...
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