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Post-Market Commentary: Tillerson, Tariffs and Trouble
The big news today is Donald Trump's sacking of his Secretary of State Rex Tillerson. Is the confrontational path that Donald Trump is choosing a precursor to an economic shock? Irrespective, I expect elevated volatility to remain a feature…
The Fed model and shocks to the price of credit (wonkish)
What if the Fed Model is wrong? Perhaps it's the change in the level of interest rates that matters, not the level. So irrespective of how high interest rates are, if the change, the delta, is large enough, it will produce an economic…
Rosengren: Fed is prepping market for accelerated hike timetable
Even the most dovish Fed officials are onboard with a regime shift toward an accelerated rate hike timetable. Boston Fed President Eric Rosengren has become hawkish. His remarks show that the Fed is now actively preparing markets for a…
Housing Is Not A Bubble, Therefore It’s A Bargain?: DiMartino Booth
Danielle's conclusion seems spot on: residential property in the US may not be in a bubble, but houses are certainly no bargain. Her view on housing is that housing affordability at the entry level has declined significantly.
Chart of the day: Average hourly earnings, 1998-2018
There is no indication that average hourly earnings are moving sustainably higher. And therefore, there is no indication that average hourly earnings have any inflationary consequences.
Today is Credit Writedowns’ 10th Anniversary
I am re-starting Credit Writedowns Pro, my paid newsletter. So this is the first in a series of posts to you my readers that I need your help to get this project off the ground.
Jobs numbers takeaway: we’re not at full employment
We are not at full employment. Don't give up on the people who have dropped out of the labor force. There are jobs waiting for them, if we allow this thing to run.
Global Policy Convergence
We should look to the ECB more than the Fed now. The market has anticipated the Fed move. The ECB, SNB and BOJ moves are yet to come.
Lael Brainard speech echoes Powell in hawkish Fed policy shift
Federal Reserve Governor Lael Brainard has given a defining speech that marks a regime shift in US monetary policy. She says that economic headwinds that favored caution have turned to tailwinds. The implication is a more aggressive…
The Fed and the red-hot, overheating US economy
In my view, the US economy is not red-hot. I don't fear overheating. But I believe the Fed does. And it will act accordingly.The regime shift is happening now. We'll just have to see how the economy responds.