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Home / Tag Archives: Not a rate-cut economy

Tag Archives: Not a rate-cut economy

“Core” Inflation Rises Most Since Sep 2008, Powered by Services and Now Even the Peculiar Case of Durable Goods

What would the Fed do if economic factors were all it looked at? Inflation as measured by the “core” Consumer Price Index, which removes the volatile food and energy segments, jumped in August at the highest rate in 11 years, by 2.39%, a smidgen above the prior peaks of July 2018 (2.35%), February 2016 (2.33%), and April 2012 (2.32%). The last time, it rose at a faster rate was in September 2008 (2.47%): The US is currently undergoing the second oil-and-gas bust since mid-2014, or...

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The Financialization of the US Economy

Services are Hopping. The #1 Biggie is Hopping the Fastest. It all adds to GDP! Service-producing industries dominate the US economy, accounting for over 70% of GDP. And this sector is hopping. Revenues in the major services categories rose 5.3% in the second quarter of 2019, compared to the same quarter a year earlier, to $4.05 trillion, not seasonally adjusted, according to the Commerce Department’s Quarterly Selected Services Estimates released today. For the first two quarters of...

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I Hope the Fed Won’t See This: Red-Hot Consumer Spending Powers GDP Growth

Revisions show the slowdown expected this year hit last year, and now is the rebound. If there’s ever a time for the Fed to not cut already low interest rates, it’s now. Economic growth in the US for the second quarter once again exceeded consensus expectations, after blowing past them in the first quarter. This morning, the Bureau of Economic Analysis reported that the economy, as measured by “real” (inflation-adjusted) GDP, grew at an annualized rate of 2.1%. It was powered by the...

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I Just Hope the Fed Doesn’t See This Jobs Report

Wall Street’s fervent hopes and prayers for rate-cut ammo were not fulfilled. Wall Street, clamoring for three to four rate cuts this year, was hoping and praying fervently for a lousy jobs report that would “force” the Fed to cut rates. Those hopes and prayers were not fulfilled when the Labor Department released its data trove for June this morning, the last jobs report before the next Fed meeting. Stocks instantly swooned. And the 10-year Treasury yield jumped by 10 basis points...

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Markets Might Hafta Grapple with “Patient”: Fed Rate Cut in July After This Inflation?

Not a rate-cut economy. The inflation index that the Fed has anointed to be the yardstick for its inflation target – the PCE price index without the volatile food and energy components – rose 0.19% in May from April, according to the Bureau of Economic Analysis this morning. This increase in “core PCE” was near the top of the range since 2010. It followed the 0.25% jump in April, which had been the third largest increase since 2010: Fed Chair Jerome Powell, at the press conference...

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What Powell Really Said about the Economy and What Would Trigger a Rate Cut

For six months now, folks said the Fed had made a “U-turn” and would cut rates at the “next” meeting, or in between meetings, and by 50 basis points, and cut, cut, cut, and would re-start QE. But none of it happened — and might not happen this year. Here’s why, in Powell’s words. During the Q&A at the press conference following the FOMC meeting yesterday, Fed Chair Jerome Powell summarized strengths, weaknesses, and “crosscurrents” of the US economy, and the global economy, in just...

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