As promised, I will always start out the new month with a blast from the past. This piece below from 2019 might be my favorite on the relative importance of monetary vs fiscal policy. Enjoy!!! $1.9 trillion of crowding out, pork, and redistribution – January 20, 2019 In November of 1968, Milton Friedman and Walter […]
Earlier this week, I attended the annual Atlanta Fed Financial Markets Conference, something I have been doing regularly for over a decade. This year, there were four reserve bank presidents and two board members in attendance, along with plenty of current and past staffers. This conference now occupies a somewhat unique position within the Federal […]
A version of this commentary will appear on the CNBC Pro website today: https://www.cnbc.com/2024/05/08/david-zervos-blame-traders-living-in-rate-cut-la-la-land-not-the-fed-for-recent-market-turbulence.html In the last 2 months of 2023, the market added an additional percentage point of rate cuts to its year-end 2024 expectation, taking the total quantity of quarter-point rate cuts priced in to seven. Looking back, most consensus forecasters pointed to […]
Before providing a few comments on the results of today’s FOMC meeting, I wanted to take care of two unrelated issues. First up, a quick logistical update. Below is list of my upcoming speaking events in May and June. If you would like to participate in, or check availability for, any of these, please contact […]
Before addressing some key macro issues that have dominated my recent discussions with clients, let me say a word about geopolitics. There are plenty of financial market professionals who fancy themselves armchair polemologists. These folks try desperately to translate their amateur geopolitical views back into a set of short-term market predictions. And almost always, they […]
The CNBC video below from one month ago, after the hotter CPI prints to start the year, is worth revisiting today. I particularly like the title CNBC chose to go with for the clip: “We don’t need rate cuts to get risk assets to go higher, says Jefferies’ David Zervos” Here are a few follow-up […]
Before tackling today’s topic, I want to respond to the many readers who reached out after a technical glitch in our new publishing system accidently sent two old notes from 2020 to my entire distribution list last Friday. I was worried that this would annoy folks who value my minimalist approach to writing. But instead, […]
I do not usually comment on market reactions to a single piece of data, but the ripfest in spoos after yesterday’s higher than expected 0.4% print in core CPI is worth a shout out. Prior to the release of market moving economic data, such as NFP or CPI, the dealer community typically provides a matrix […]
For over a year I have tried to convince clients, colleagues, and competitors that the colossal size of global central bank balance sheets has been deeply underappreciated by the macroeconomic forecasting community. The long-term stimulative effects from these balance sheets caused many folks to consistently overestimate the true level of restrictiveness for monetary policy. In […]
Not a day goes by without some high-profile market pundit, C-suite executive, politician, or portfolio manager preaching about the grave fiscal risks that face the US. In fact, I would venture to guess that it’s a top 3 discussion point for anyone looking to scare up a bit of doom within a public speech, newspaper […]