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Tag Archives: Macroeconomics

Eurozone Inflation Beats Expectations, Yet Euro Is Disappointed

After this week's hawkish central banker whirlwind, traders and analysts were keenly looking forward to today's Eurozone June inflation print to see if it would validate Draghi's unexpected hawkish pivot; the data was released on Friday morning by Eurostat, and while dropping from May's 1.4% headline print to 1.3%, it beat the 1.2% consensus expectations, rising 1.3%. The core print of 1.1% excl. energy, food, alcohol and tobacco likewise beat estimates of 1.0%, and was above May's 0.9%....

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Lacy Hunt: The Fed Has Undermined The Economy’s Ability To Grow

Authored by Stephen McBride via MauldinEconomics.com, The Fed’s hope was that quantitative easing would stimulate economic growth. But a former senior economist for the Fed believes it has done the exact opposite. Speaking at the Mauldin Economics Strategic Investment Conference, Dr. Lacy Hunt, the executive vice president of Hosington Investment Management and former senior economist for the Dallas Fed, said that quantitative easing has created “significant unintended consequences.” The...

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Goldman Raises S&P500 Year-End Price Target From 2,300 To 2,400

Throughout the first half of the year, as stocks kept grinding ever higher and Goldman issued one after another bearish equity strategy note, the bank's chief equity analyst David Kostin stubbornly kept Goldman's S&P price target at 2,300. Now, "unexpectedly" with stocks finally cracking with some violent moves in the tech sector after repeated warnings by top Fed bankers that stock "valuations are too rich", moments ago Kostin just raised Goldman's year end price target from 2,300 to...

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The Super Bubble Is In Trouble

Authored by Thorsten Polleit via The Mises Institute, You do not need to be a financial market wizard to see that especially bond markets have reached bubble territory: bond prices have become artificially inflated by central banks' unprecedented monetary policies. For instance, the price-earnings-ratio for the US 10-year Treasury yield stands around 44, while the equivalent for the euro zone trades at 85. In other words, the investor has to wait 44 years (and 85 years, respectively) to...

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An Open Letter To The Fed’s William Dudley

Authored by MN Gordon via EconomicPrism.com, Dear Mr. Dudley, Your recent remarks in the wake of last week’s FOMC statement were notably unhelpful. In particular, your excuses for further rate hikes to prevent crashing unemployment and rising inflation stunk of rotten eggs. Crashing Unemployment Quite frankly, crashing unemployment is a construct that’s new to popular economic discourse, and a suspect one at that. Years ago, prior to the nirvana of globalization, the potential for wage...

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Four Reasons Central Banks Are Wrong To Fight Deflation

Authored by Jorg Guido Hulsmann via The Mises Institute, The word “deflation” can be defined in various ways. According to the most widely accepted definition today, deflation is a sustained decrease of the price level. Older authors have often used the expression “deflation” to denote a decreasing money supply, and some contemporary authors use it to characterize a decrease of the inflation rate. All of these definitions are acceptable, depending on the purpose of the analysis. None of them,...

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What’s causing the low inflation?

This article caught my eye: When online retail giant Amazon.com Inc. announced last Friday that it would purchase Whole Foods Market Inc., a plunge in retail and grocery stocks reinforced the disinflationary tone set by three straight months of disappointing data on consumer prices. It's an example of the technological forces that are increasing competition and further limiting companies' ability to pass on...

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Derivative Markets Signal Looming End Of The Business Cycle

While the last five weeks have seen $1.3 trillion of rate-hike bets have already been unwound - the most ever; the derivative market is signaling there is more pain to come as expectations for lower rates are everywhere. Just another $1.9 trillion of rate-hike bets to unwind... But as Bloomberg's Tanvir Sandhu notes, rates, skews, and inflation cross-currents suggest lower yields to come this summer... USD short-dated skews on 10-year tenor remain deeply negative, with receivers trading at...

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Welcome To The Valium Era

Authored by Bonner & Partners' Bill Bonner, annotated by Acting-Man's Pater Tenebrarum, Don’t Be Fooled by These Calm Markets What is happening in the world of money? Well – the most striking thing is: nothing. It doesn’t seem to matter what happens. Dysfunction in Washington. Meltdown of the techs. No matter how rough the seas get, the markets glide along… scarcely noticing the storm-tossed waves below. Thankfully the world’s central planners are so well-versed in egging on the...

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Cudmore: Yellen Just Made A Big Mistake

One of the lingering questions to emerge from yesterday's FOMC meeting, after Yellen's "first dovish, then hawkish" statement rocked the dollar and markets, is whether the Fed chair has some more accurate way of forecasting inflation than the rest of market to justify her optimistic outlook, and to explain why the divergence between the Fed's dot plot and the market's own FF forecasts is nearly 100%. And, if not, is the Fed about to make another major policy mistake by forecasting a far...

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