Catchy title huh? But I'm sorry to disappoint all the haters out there, I will not be referring to a crash in risk assets. I will leave that exercise in futility for the doomsayers and goldbugs who have been calling for Armegeddon since 900 on the spoo! Instead I'm going to discuss the crash that […]

We just saw one of the "easiest" Fed removals of accommodation in history. And as mentioned previously, this meeting was one of the closest calls in recent memory. Here is what I wrote on Dec 10th in a commentary entitled "Smaller or Later Redux" - "As for the market reaction to the upcoming FOMC meeting, […]

The news of Stan Fischer's appointment to the Federal Reserve Board as vice chairman for monetary affairs did not seem to generate any market cheer last week. After the announcement many folks quickly scanned the recent press to obtain a better handle on his views. What they found were his rather skeptical comments on forward […]

The employment data last week was certainly strong enough for the Fed to move ahead with a taper at the upcoming FOMC meeting. A 7% unemployment rate with a RISING participation rate and a 200K handle on payrolls is about as good as we could have wished for. And the most beautiful part of the […]

"The economy cannot on its own generate enough steam to provide our full potential of growth" - Alvin Hansen, "The Stagnation Thesis" (1954) The first economist to use the term "secular stagnation" was Harvard Professor Alvin Hansen in his 1938 work entitled "Full Recovery or Stagnation?". This concept seems to have found a new lease […]

With Janet's hearings out of the way, there is little to focus on with regards to Fed policy into year-end. The next major event will be November payrolls, but even a big print will not likely catalyze a taper. With all the talk of lower unemployment thresholds, higher inflation tolerances, nominal GDP targeting, endogenous supply […]

Days like yesterday are simply magical – spoos +14 and EDZ6 +16; it just doesn’t get any better. The risk market and the risk-free markets were both strong to start the day, on rumors that the Fed might lower the IOER in conjunction with an initial taper. What a fantastic idea! Every day I think […]

A 2.8% GDP print and 200k+ on payrolls are poison for the hater community. For those who thought QE is just pushing on a string, or the government shutdown would destroy growth, or the business cycle is dead, or Rob Ford did not have a substance abuse problem.....I'm sorry to inform you, the data (and […]

"The function of economic forecasting is to make astrology look respectable." – John Kenneth Galbraith Just about 23 years ago I entered the Marriner S. Eccles building for the first time, walking through the doors on C Street between 20th and 21st. As I passed security and stood in the foyer, I marveled at the […]

All that can be gleaned from yesterday's FOMC statement is that the Committee seems a bit more comfortable with 10s at 2.50% than at 3.00%. The October missive was essentially a repeat of September with one exception - the removal of the reference to tighter financial conditions. And while some folks were preparing for softer […]