Search Results for: Fed

The U.S. Unemployment Rate Is Historically Low But the FOMC projection suggests that the unemployment rate cannot improve indefinitely. Image: Federal Reserve Bank of Richmond

What is the Biggest Risk Right Now for Investors? What is the Biggest Risk Right Now for Investors? The risk of a Fed policy error The probability of a Fed rate cut in July 2019 is now 84.6%. Image: Bloomberg

Probability of US Recession is Rising Mike Wilson, chief U.S. equity strategist for Morgan Stanley, said that “Fed could cut as soon as July but it may not halt slowdown/recession.” Image: U.S. Global Investors

Small Business Optimism Roars Back, Rivaling Historic Highs Small Business Optimism Index improved: expectations for sales, business conditions, and expansion rose. That’s good news for the U.S. economy. See why the “Small Businesses Optimism Index” is a good recession indicator. Image: National Federation of Independent Business (NFIB)

Market Smell A Recession As Yield Curve Inverts Quant models and yield curve inversion smell of recession rather than mid-cycle Fed eases. Image: J.P. Morgan

Cyclical Stocks Responding to Steepening Long-term Yield Curve Keep in mind that the Fed has little influence on the long end of the yield curve. And currently, the 30-year Treasury rate minus 10-year Treasury rate spread has a normal upward slope, like in the mid-1990s when the economy was growing. The chart below shows that the…

Decomposing the U.S. 10-Year minus 3-Month Treasury Yield Spread since 2013 This great chart shows that the “Global Economic Data” variable has a significant impact on the U.S. 10-year minus 3-month Treasury yield spread since 2018. An R² of 0.902 means that more than 90 percent of the variance in the U.S. 10-year minus 3-month Treasury yield spread…

Markets Have Accurately Priced in Cuts before Easing Cycles Begin Orange lines mark days when markets priced in a rate cut. In recent history, it occurs between 33 and 281 business days before fed cut. The average is 120 business days. So, the Fed’s rate cut could take place in September 2019. You may also…

Mean Probability That U.S. Stock Prices Will Be Higher One Year From Now – Survey of Consumer Expectations – The mean probability that U.S. stock prices will be higher one year from now is 41.03% as of April 2019. Image: New York Fed Survey of Consumer

QE to Infinity and Beyond? Analysts say the Fed will resume and buy “just” U.S. Treasuries next year. The Fed’s balance sheet should rise past its historic peak. Image: Bloomberg – Cartoon: Hedgeye Risk Management LLC

“Ken Fisher: Thinking in Ways That Others Do Not, with John Tamny” Great interview of Ken Fisher on: coastal redwoods, dikes and climate change, efficient markets, quantitative easing (QE) vs. inflation, humans as a group are slow to learn, recessions, Fed and interest rates, why philanthropy is bad and immoral, and why inequality is a good…