Here is a simplistic version of the game played every day in the global trade arena. Each country chooses to either be cooperative (C) or uncooperative (U). Below are some illustrative payouts: C:C -> $100:$100 C:U -> $30:$130 U:C -> $130:$30 U:U ->...
A little more than a week has passed since Jay decided to slip on a red jersey and distance himself from that politically charged 50bps rate cut just before the election. His dovish messaging was crystal clear. And the near complete shutdown of Treasury QT put dovish...
Before proposing a 12-step recovery journey for countries struggling with fiscal policy addiction issues, I have two housekeeping issues and a quick FOMC thought to share: I want to apologize for the technical problems with last Thursday's macro zoom. It was...
Impending cuts in both federal spending and employment have added uncertainty to the economic outlook. While gains in government efficiency are generally seen as beneficial, if the transition takes place too quickly, there may be some unpleasant side effects from a...
The term reprivatization has entered into Trump policy lexicon courtesy of our new Treasury Secretary. To be sure, it is an excellent choice of vocabulary when describing the process of moving resources out of a less efficient, kakistocratic public sector into a more...
The mainstream economics profession, through their Phillips Curve based Keynesian models, brought you the failed forecasts of recession and sharply higher unemployment in 2023/24. They also brought you the flawed stagflationary trade policy predictions during Trump...
Like most folks, the first time I heard of DeepSeek was around 48 hours ago. I quickly tried to read all the "expert” analysis I could find on what they purportedly accomplished for a fraction of the cost their US peers incurred. After a few hours, I found credible...
To start 2025, I want to harken back to Q2 2013, when both spoos and gold were trading around 1500. It was a time when folks were still hurting from the GFC, and plenty of skeptics still thought the US was heading for a Japanese- or Zimbabwean-style economic outcome....
Prior to the election, I wrote a few notes suggesting that we are headed towards a neutral monetary policy stance that is similar to that which prevailed at the end of 2019, before all the craziness of COVID. Specifically, I argued that the eventual equilibrium...
This month's "From the Vault" is a little more recent than usual, but I thought it would be an enjoyable reprint before year end. We don't need rate cuts to get risk assets to go higher - April 10, 2024. The CNBC video below from one month ago, after the hotter CPI...
This month's "From the Vault" is a little more recent than usual, but I thought it would be an enjoyable reprint before year end. We don't need rate cuts to get risk assets to go higher - April 10, 2024. The CNBC video below from one month ago, after the hotter CPI prints to start the year...
