Yellen’s Speech Today and the Dollar Outlook

June 6, 2016

The Fed Chair’s speech in Philadelphia today did not depart significantly from her previous comments on the U.S. economic outlook, risks to the baseline forecast, and how Fed policy might evolve from here.  One apparent change, which markets already had concluded, is that a federal funds rate hike to 0.50% at next week’s FOMC meeting […] More

FOMC Minutes and a Missing Plane Rattle Market Nerves

May 19, 2016

A wide range of commodities have dropped sharply, including overnight declines of 1.5% in gold, 1.9% in oil and over 2.0% in copper. Stocks and bonds also suffered. Share prices dropped 1.3% in New Zealand and Singapore, 1.2% in India, 1.0% in Hong Kong, 0.8% in Taiwan, 0.6% in Indonesia and Australia, and 0.5% in […] More

FOMC Preview

April 27, 2016

Six weeks have passed since the March16 FOMC statement and ensuing press conference.  My review of those events can be seen here.  Since the statement’s release, the dollar has fallen 2.0% against the euro and 2.2% relative to the yen.  The 10-year Treasury yield is declined ten basis points on balance, while the Dow Jones […] More

FOMC Day and an Australian Data Surprise

April 27, 2016

The Federal Open Market Committee will release a statement at 14:00 EDT (18:00 GMT) on the results of its third policy meeting of 2016.  The federal funds rate is not expected to change, and attention will be focused on comments regarding U.S. economic conditions and likely prospects for clues to the timing of the next […] More

Chernobyl Anniversary, Five U.S. Primaries, and Firmer Oil Price

April 26, 2016

Today is the 30th anniversary of the nuclear reactor accident in Chernobyl.  That event still constrains use of nuclear power even as the planet continues to warm. Today’s U.S. presidential primaries are in Pennsylvania, Maryland, Connecticut, Delaware, and Rhode Island.  384 Democratic Party delegates and 118 Republican delegates are at stake.  Trump is expected to […] More

High-Flying Yen

April 7, 2016

The yen climbed to new highs for the move of 108.02 per dollar and 123.12 per euro.  The yen overnight gained 1.3% on balance against the U.S. currency despite yesterday’s hint from a Ministry of Finance official that intervention is possible.  Today, Prime Minister Abe seemed to undermine that threat, saying that countries should not […] More

Across-the-Board Dollar Losses

March 17, 2016

Today’s market focus has been on central bank policies. The FOMC cited global developments and a downwardly revised perception of the longer term neutral interest rate level to justify only around two likely interest rate hikes in 2016 and a lower federal funds rate path throughout the forecast period. The Bank of Norway, Norges Bank, […] More

FOMC Statement and Press Conference

March 16, 2016

A 9-1 vote left the federal funds target range at 0.25-0.50%, with K.C. Fed President Esther George dissenting in favor of a 25-basis point tightening.  The FOMC released a statement and new forecasts that Identified a moderate continuing recovery with progress both toward absorbing labor market slack and raising inflation closer to the central bank’s […] More

FOMC Preview

March 16, 2016

  Since the last FOMC meeting in late January, which unlike today’s did not unveil new forecasts or hold a press conference, commodity and stock prices have recovered, the dollar has eased (especially against the yen), and the 10-year Treasury yield has slipped marginally on balance.  A rate hike today is not anticipated. EUR/$ $/JPY […] More

Awaiting the FOMC Decision and Digesting Other Developments

March 16, 2016

Trump and Clinton were big winners in Tuesday’s primary elections, winning North Carolina, Florida, Illinois and each leading narrowly in Missouri votes that remain too close to call.  Ohio was captured by Clinton and Kasich. Trump may skip the next Republican debate and predicts violence at the Salt Lake City convention if Republican establishment attempts […] More