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When will the Fed pause its tightening of policy?
If you've been reading my most recent posts on US monetary policy, the sense you would have been getting is that the Fed is shifting away from its tightening bias. And the main reason it's unclear what this means in terms of actual policy,…
Theresa May’s saving grace is the ticking clock on Brexit
We now have a Conservative Party vote of confidence by secret ballot scheduled for tonight in the UK. Enough Tory MPs sent letters to the 1922 Committee chair to trigger the vote, throwing the Brexit outcome into further turmoil. But there…
Handicapping potential outcomes in the Brexit saga
The latest news out of the UK is that British Prime Minister Theresa May has decided to postpone a Parliamentary vote on the deal she negotiated with the EU over the terms governing Britain's departure from the EU. Had the vote gone ahead,…
Cold War 2.0, a broken Germany and a US Federal Reserve at the crossroads
Recent news shows decision -making crossroads in the China-US trade dispute, in German politics and in Fed policy.
Six topics I am following which will impact economy and markets (part two)
There are a lot of things going on right now. And uncertainty surrounds all of it, from China-US trade and NAFTA to the economy and monetary policy to regulation and Brexit. I think there is more uncertainty surrounding these issues than is…
Six topics I am following which will impact economy and markets (part one)
I want to use the news flow to highlight several issues that I am following that should have a major impact on the economy and financial markets in the next year. All of these topics are laden with risks that skew to the downside. And that…
General Motors is proof that slashing wages isn’t the ticket to profitability
German and Japanese auto manufacturers succeed despite sticking to a high-wage model.
The global growth slowdown is accelerating
The US is not going to be the engine of global growth here. With Europe, focused on exporting its way to growth and China both slowing and in jeopardy of tariffs, we have the makings of difficult times in 2019.
More on the US Treasury yield curve inversion and widening bond spreads
Yesterday, the US Treasury yield curve inverted between 2- and 5-year rates. Right now, the 2-year is trading at 2.82%. While the 5-year is trading at 2.81%. So, the curve remains inverted.
The US treasury yield curve has inverted
While everyone was focussing on the relief rally in stocks yesterday, the US treasury yield curve inverted for the first time in over a decade. This is a negative signpost in a world in which the Federal Reserve is almost certain to raise…