Insights
U.S. Interest Rates Commentary and Research from Eric Hickman
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The Fed gave half an inch
After the last FOMC meeting, I wrote, “Powell didn’t give an inch”, referring to his avoidance of acknowledging economic weakness. In this meeting, there were some acknowledgements of economic weakness (half an inch, let’s say), but Powell did his best to be dismissive of them…
Five reasons to expect some softening from the Fed tomorrow
Last month, with economic data weakening quickly and Federal Reserve Governor Christopher Waller lobbying for a cut, I expected the Fed to cut rates at the FOMC meeting this week. But upon the strong payroll report on July 3rd, I wrote in my semi-weekly LDEI…
Don’t fall for the Q2 growth mirage
Stock bulls have something of a mantra now, “the recession is cancelled” from forecasts of GDP to rise significantly in Q2, tariffs coming down, and the Fed’s characterization of the economy as “solid.” These three pillars have reinforced each other to create an optimistic narrative…
The US Dollar is fine
News stories abounded in the last two days reporting that the US Dollar (DXY index) had the worst first half since 1973. See examples below: Financial Times: Bloomberg: The New York Times: The Wall Street Journal: Also, stories from the New York Post, The Guardian,…
Five of six NBER recession indicators are negative
The National Bureau of Economic Research (NBER), the official arbiter of recessions, uses six monthly indicators to determine recessions. It looks for a contemporaneous peak across them to know that a downturn is sufficiently spread across the economy (diffusion). The NBER looks for three qualities…
Waller keeps it real like Martha Seger did in 1990
After months of the Fed avoiding any discussion of the economy weakening (see here and here), Federal Reserve Governor Christopher Waller, in a CNBC interview with Steve Liesman on Friday, finally acknowledged what has become stark in the economic data (LDEI), the economy is becoming…
Powell didn’t give an inch
I thought Federal Reserve Chairman Jerome Powell would begin to acknowledge economic weakness at the FOMC meeting yesterday given all the deterioration I wrote about on Tuesday, but he didn’t — at all. Jeffrey Rosenberg of Blackrock aptly said the Fed is in ‘nothing to…
Bigger than tariffs
Also on Advisor Perspectives here. With the stock market recovering most of what it lost earlier this year and tariffs coming down from the scary levels of Liberation Day, the consensus thinking is that the past few months were just another recession scare like 12/2023…
Waller wants cuts and his simple tariff inflation model to get there
Federal Reserve Governor Christopher Waller was interviewed on Fox Business this morning where he is hopeful that lower tariffs won’t affect the economy as negatively, but at the same time, he hopes the Administration’s movement towards long-term tariff settlement levels will allow for the Fed…
US downgrade in context and yield effect; probably none
Moody’s downgraded the United States long-term debt rating to Aa1 from Aaa on Friday afternoon. On the more familiar S&P scale, this is the equivalent of downgrading one notch from AAA to AA+. Moody’s is the last of the three main credit agencies to lower…