Deeper Analysis

Third Quarter 2023 in Figures

September 29, 2023

Market sentiment about future monetary polices underwent significant change over the course of the third quarter. While interest rates were raised further by the ECB, Fed, and Bank of England, the catalyst for the transformation came from rhetorical signals that high rates would be maintained for much longer and recede much more slowly than imagined […] More

FOMC Signals Only One Likely Interest Rate Hike Next Quarter But Less Reduction in 2024 Than Presumed Earlier

September 20, 2023

FOMC members voted unanimously not to increase the federal funds rate at their sixth scheduled monetary policy review of 2023, and they signaled that at the end of this year the rate is likely to be only 25 basis points higher than now. The big surprise to Fed officials regarding how the U.S. economy has […] More

August 2023 in Figures

August 31, 2023

During August, the stock market indices in this monthly feature fell between 1.6% and 3.4%. The 10-year U.S. Treasury yield’s rise of 14 basis points exceeded increases in the comparable Japanese, British and Canadian sovereign debt yields, and German and Swiss yields posted modest declines. The Bank of England’s base rate was raised 25 basis […] More

U.S. Economic Performances of Trump and Biden Years Compared

August 5, 2023

This blog entry continues a series of posts carried in Currency Thoughts that compares five vital indicators of economic performance during different presidential administrations. The five measures are growth in jobs, growth in real GDP, consumer price inflation, the dollar’s value against the euro, and the DOW Jones Industrials average. Each result is expressed as […] More

July 2023 in Figures

July 31, 2023

July was a strong month for equities and a period when the dollar eased pretty much across the board. Policy interest rates rose 25 basis points at the Federal Reserve, European Central Bank, Bank of Canada, and National Bank of Serbia. Larger central bank rate changes were executed at the Bank of Ghana (+50 basis […] More

Round-Up of U.S. Data Released Today

July 27, 2023

U.S. GDP growth accelerated from 2.0% at an annualized rate in the first quarter to a quarterly 2.4% pace in the second quarter. This was the earliest estimate and exceeded analyst expectations of a slowdown to 1.8%. The earliest estimate of growth in the first quarter was 1.1%, but that figure eventually got revised up […] More

A Deeper Dive Into a Thought Mentioned in Tuesday’s Overnight Rundown of Developments

July 11, 2023

I postulated earlier today that the Federal Reserve would likely have been closer to its first priority of returning U.S. inflation to its 2.0% target in a sustainable manner if two things had been done differently at the initial stage of the interest rate tightening cycle: 1) starting the process sooner and 2) making a […] More

Second Quarter 2023 in Figures

June 30, 2023

Stickier inflation than elsewhere in the U.K., where the CPI remained at 8.7% in May, was reflected in a bigger increase during 2Q in long-term interest rates as well as a more aggressive 75-basis point Bank of England rate hike. In a quarter when share prices rebounded in other industrialized economies, the British Ftse closed […] More

FOMC Preview

June 14, 2023

The Fed seems likely to pause the cycle of interest rate hikes, wherein the federal funds range target has climbed five percentage points (ie, 500 basis points) since mid-March 2022, with a rate hike announced at every scheduled policy review in that period but not at all on an emergency intra-meeting basis. The concurrent 5.4% […] More

FOMC Statement and Press Conference

May 3, 2023

Statement: As markets were expecting, the federal funds target was increased by 25 basis points to 5.0-5.25%. The new target ceiling for the first time matches the level existing when the sub-prime mortgage credit crisis first surfaced in the summer of 2007. The statement justifying today’s action makes only a few modifications from the prior […] More