Deeper Analysis
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
April 2023 in Figures
April 28, 2023
In April, sovereign debt yield movements were mixed, equities rose, and the yen and dollar weakened. Oil and gold prices rose modestly. None of the central banks in the table below experienced an interest rate change. 10-Yr Yield 03/31/23 04/28/23 April Change U.S. 3.47% 3.44% -3 Basis Points Germany 2.29% 2.31% +2 Japan 0.20% 0.38% […] More
U.S. March Labor Market Report Doesn’t Move the Needle
April 7, 2023
The likeliest FOMC rate decision at May’s meeting remains a 25-basis point rate increase. There were some encouraging signs from the standpoint of convergence on what the Fed seeks. On-year average hourly earnings growth slowed to 4.2% from 4.6% in February and 4.7% in January, and the March-over-December change expressed at an annualized rate was […] More
March 2023 and First Quarter in Figures
April 1, 2023
Central bank interest rates continued to climb in the first quarter, but longer-term rates fell amid worries about the health of banks and mounting expectations that a recession lies ahead. Recessionary fears were not evident in equity market behavior, however, as the quarter showed a decent rebound after last year’s relentless difficulties. The price of […] More
The Global Dimension of the Central Banking Effort to Reduce Inflation
March 28, 2023
A wide spectrum of central banks’ policy interest rates have been raised substantially. The effort began in 2018 in Sweden, in 1921 for monetary authorities in the U.K., South Africa, New Zealand, Pakistan, Poland,Hungary, the Czech Republic, Norway, Denmark, Iceland, South Korea, Sri Lanka, Chile, Mexico, Brazil, Argentina, Peru, Colombia, and Ukraine. In 2022, the […] More
February 2023 in Figures
February 28, 2023
The dollar appreciated significantly and broadly during February as risk aversion returned. The tone of remarks by Federal Reserve officials became more hawkish, and U.S. price and activity data suggested that U.S. monetary policy is not yet out in front of the problem and will need to be tightened more than previous forward guidance had […] More
The Dollar Then and Now Highlights Why the Current Inflation Has Been Different from the Previous Bout
February 20, 2023
The dollar was a poorly bid currency during the high-inflationary period of the 1970’s. In the wake of World War Two, a new international monetary system based on fixed dollar parities and dollar-gold convertibility was established, and it performed well in the 1950’s and early 1960’s. Difficulties arose in the second half of the 1960’s […] More
