4 min read2024 Recap 2024 saw major central banks begin to ease policy including both the Fed and ECB which each cut rates by 100 basis points. Risk assets had another strong year with the S&P 500 returning +25%, the first time since the 1990s that the index had back-to-back +20% returns. Gold rose over +27%, its…
3 min readFed Speakers Convey Caution on Pace of Rate Cuts Several Federal Reserve officials have echoed a theme conveyed by Fed Chair Powell that the FOMC is in “no hurry to lower rates” and the central bank could slow its easing pace given stronger than expected economic data. For example, year-over-year inflation readings for both CPI…
4 min readEconomic forecasting is oftentimes an exercise in futility. Analysts with access to all the data and the best models can be no more accurate in their forecasts of unemployment and GDP than the average layperson with some conceptual knowledge. Take for instance September’s jobs report, which caught nearly everyone by surprise. Most analysts predicted non-farm…
5 min readPotential for a Fed Santa Pause The Fed followed up their September 50 basis point rate cut with a unanimous 25 basis point cut on November 7th, bringing the federal funds target range to 4.50%-4.75%. With one remaining FOMC meeting this year on December 18th, the market has been flip-flopping between the potential for another…
5 min readResilient Consumer Continues to Spend – No Grinch Forecasted Recent economic data highlights a resilient consumer ahead of the holiday season: Yields Rise on Data and Election Outlook October saw treasury yields rise approximately 40 to 60 basis points from 2 years to 30 years with several narratives behind the increase in yields: Mixed Labor…
3 min readLabor Market Remains Solid but Data Could be Noisy Ahead The September employment report was solid overall but with hurricanes Helene and Milton hitting the Southeast of the United States, labor statistics could be noisy ahead. September Employment Report: Looking ahead, the October jobs report (which will be released on November 1st) will incorporate layoffs…
4 min readMarket Reaction Following the September FOMC Meeting Since the Fed cut the federal funds rate on September 18th, a notable market reaction has been a steepening of the treasury yield curve with front-end treasury yields lower, and longer-end yields higher (see chart 1 below). This move in the curve was expected, as the Fed is…
6 min readFed Cut Rates by 50 Basis Points – But 50 is Not “the New Pace” At the September 18th FOMC meeting, the Fed cut the federal funds rate for the first time in over 4 years by 50 basis points to a new range of 4.75%-to-5.00%. Heading into the meeting, Fed Chair Powell made clear…
3 min readThe Time Has Come To Cut Rates In his keynote address at the Federal Reserve’s Jackson Hole Economic Symposium, Federal Reserve Chair Powell said the Fed now feels it is time to adjust monetary policy. His comment followed the release of the minutes from the Fed’s July FOMC meeting, which showed “several” members were in…
6 min readRecent inflation readings have shown promise that price increases are returning to the Fed’s 2% target, a positive for the consumer and economy that may allow the Fed to pivot towards rate cuts. Simultaneously, consumer product manufacturers are facing a pivot of their own. Changes in consumer shopping patterns suggest that the resilience consumers touted…