Posts filed under “Federal Reserve”

Interest Rates Aren’t Going Anywhere . . .


Source: BAML, Fiscal Times

 

 

I have been fairly agnostic on several issues related to where interest rates are heading. It has never been my job to forecast where the 10-year yield will be in six months. Not predicting and not caring are two very different things, however. Rates matter a great deal — to investors, to the economy and most of all to debtors of every kind.

You would be hard-pressed to find anyone in finance who would ever admit to believing that rates don’t matter. Despite the importance of bond yields and borrowing costs, few seem to have any idea how to analyze them in a way that provides a helpful conclusion.

And while many are quick to point out how disruptive the Federal Reserve programs of quantitative easing and zero-interest rates have been to stock and bond prices, that’s a terrible excuse. One would think that something so big, so contentious and so transparent would be easy to insert into traditional economic models. But no.

As it turns out, most of the economic community on Wall Street has gotten this terribly wrong. Some have disagreed, such as Jeff Gundlach and Gary Shilling (see this and this) but they are notable exceptions.

 There are many indicators that keep suggesting that our lowlowlow rate world is going to stay this way for a long time. Some of these are turning out to be more significant than many had expected.

First . . .

 

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Category: Credit, Federal Reserve, Fixed Income/Interest Rates, Psychology, Really, really bad calls, Taxes and Policy

Atlanta Fed’s Forecast for 2015 Q1

Category: Economy, Federal Reserve, Think Tank

Risk Management for Monetary Policy Near the Zero Lower Bound

Category: Federal Reserve, Think Tank

The Fed’s Hidden Message Contained Within the Dots . . .

Of all the maddening things about this month’s Federal Open Market Committee meeting, perhaps the single most annoying is the hoopla surrounding the so-called dot plot. It even has its own Twitter hashtag: #Dotplot. The dot plot is a chart that shows the expectations of each FOMC member — absent their names — for where they believe the…Read More

Category: Federal Reserve, UnGuru

The Fed — Drunken Coxswain of the SS America

The Fed – Drunken Coxswain of the SS America Paul L. Kasriel The Econtrarian, March 17, 2015     Back on January 25, I penned a piece entitled “The Fed – Lucky or Smart?”. In that commentary I argued that the Fed was managing the supply of total thin-air credit, i.e., the sum of commercial…Read More

Category: Economy, Federal Reserve, Think Tank

Art Cashin: Fed Actions In 2004 (“Patience”)

Form Strategas by way of Art Cashin of UBS:   Everything old is new again. Here’s an interesting surprise from Jason’s people at Strategas, courtesy of my good friend and remote FoF member, Alan Battles of Salt Lake City. (Fed statements 2004.) Please note the “patient” in the March statement.

Category: Federal Reserve

Do Lower Gasoline Prices Boost Confidence?

Do Lower Gasoline Prices Boost Confidence? Aditya Aladangady and Claudia R. Sahm FEDS Notes, March 6, 2015     A gallon of gasoline currently costs one third less than it did last summer, as shown by the solid line in Figure 1. Gasoline makes up 5 percent of average family spending, so lower prices at the pump…Read More

Category: Energy, Federal Reserve, Sentiment, Think Tank

Interesting analysis from Torsten Sløk of Deutsche Bank:   Source: Torsten Sløk, Ph.D., Deutsche Bank Research

Category: Federal Reserve, Fixed Income/Interest Rates

Time for Janet Yellen to Go On the Ellen DeGeneres Show

This week, the NBC/Wall Street Journal poll on presidential contenders for 2016 came out. It was the usual sort of thing: Favorable versus unfavorable ratings for the candidates: Democrats like Hillary; Republicans like Jeb (but not as much as Dems like Hillary); no one likes Chris Christie or Donald Trump. But you might have missed a fascinating tidbit buried…Read More

Category: Federal Reserve, Really, really bad calls, Taxes and Policy

What the Fed Will Be Looking at in Today’s Employment Report

Today’s employment report may be hard to read: The severe weather in the Northeast and Midwest affected the Labor Department’s data-collection process. The weather has been so disruptive that department  employees can’t even get into the office on time to release this morning’s report. For the first time ever, it’s being released online. But as I…Read More

Category: Data Analysis, Employment, Federal Reserve