Stages in a bubble
The graphic below, Stages in a Bubble, was created by Professor Jean-Paul Rodrigue in 2008. Note the “New Paradigm” at the top. When I reference the idea of a “new paradigm” in my notes (like here and here), it is because it has long-been noticed…
The Fed meeting today wasn’t as hawkish as it seems
The headline from the Fed meeting today is that the median of their Survey of Economic Projections (SEP) shifted from expecting three cuts by the end of this year on March 20 (two meetings ago) to just one cut today; up 50 basis points. The…
Unemployment Rate rise says no soft-landing
The Unemployment Rate rose to a new recent high of 4.0% on Friday (red dot in chart below.) Notice that when this rate makes a low and then begins to rise up (curl), a recession (gray vertical bars) is nearby. The Unemployment Rate has now…
On the yield movement caused by the Jobs report today
The 2-year yield is higher by a large 16 basis points today after the non-farm payroll (NFP) report came in above expectations (272k jobs added versus 180k expected.) It was a big “beat”, but more importantly for the bond market, it didn’t corroborate the recent…
Advisor Perspectives award
I didn’t see this until yesterday, but I was named one of the Top 25 Venerated Voices™ by Advisor Perspectives in the third quarter of last year for my writing. I was ranked 17 of 25 and share the award with recognizable industry names like Howard Marks,…
Economic data weakens further
Economic data is especially important now because the Fed is “data dependent” in determining when and how much to lower interest rates. As I wrote earlier this month (5/3), there was a meaningful downward shift in economic data at the beginning of this month with…
Fed meeting: no need to raise rates
The Fed concluded their latest meeting yesterday. In the press conference, Jerome Powell dismissed the notion that the Fed may need to raise rates again in several answers to questions. Leading up to the meeting, some commentators had thought that because the economy continues to…
Why the 2yr yield rose so much after CPI today
From a small difference in where CPI (consumer price index) was released vs. where it was expected to be this morning, the 2-year U.S. Treasury yield rose about 20 basis points. Headline CPI came in at +0.4% and it was expected to be +0.3%. Core…
Powell’s speech yesterday
Jerome Powell gave a speech at Stanford University yesterday with a Q&A afterwards. Powell stayed dovish (in contrast to Christopher Waller late last week.) What I found more interesting was that Powell refuted many of the current discussions as to why the Fed shouldn’t or…
Fed meeting summary: dovish
At the conclusion of the Fed’s FOMC meeting today, the dot plot report (SEP) showed expectations for the Fed Funds rate (median) to stay at three cuts for 2024 but one fewer in 2025 (from the December 2023 projections.) While the average dot (simple) rose…