Monetary policy optimism gave equities a nominal boost. Richmond Fed President Tom Barkin stated the policy outlook remains in a delicate balance given the conflicting pressures from rising unemployment and still high inflation, but rates are around the “neutral rate” or the rate that neither adds nor detracts from growth. Today is a data dump … Read more
There was little reaction to the headlines that manufacturing activity shrank in December by the most since 2024. The measure has been in “contraction territory” for 10 consecutive months. The reason for the decline is that producers are drawing down their raw materials inventories at the fastest rate since October 2024 thus suggesting later strength … Read more
This is a data filled with many believing the statistics will be absent the noise of government shutdown. Many are surprised at the quickly steepening yield curve between the two-year and thirty-year Treasury, a steepness that was last experienced over four years ago when the term transitory was imbedded in the lexicon as the Federal … Read more
Welcome to 2026. Will 2026 be a continuation of 2025 where the unexpected consistently occurs? The prevailing theme is a view of a public persuasive distrust in virtually every institution in American life. There is almost no authority figure, august body in our society in which most people have confidence. In many ways, our nation’s … Read more
Yesterday’s release of two months of employment data was noisy. The bullish narrative was cancelled out by the bearish narrative and vice versa. As noted several weeks ago it may take until early 2026 to clear the noise from the economic releases. Markets were quietly volatile on the data closing in the well-defined range. Worldwide … Read more
There are some that are “shocked” the yield curve is steepening as dramatically as it has following two successive rate cuts. One pundit stated this steepening is as “predictable as it is inexplicable.” Some ardently believed that if the FOMC lowered interest rates, longer dated Treasuries would follow. The steepening in the curve commenced in … Read more
To surprise of many, the 30-year Treasury is now at the highest yield since September as the implications of last week’s interest rate cut and policy stance is being digested by the markets. Inflation is still 50% to 75% higher than 2% FOMC mandated speed limit. Economic growth is “steady” and perhaps accelerating, companies are … Read more
As widely expected, the Federal Reserve delivered a third consecutive interest rate reduction and maintained their outlook for just one cut in 2026. The vote was 9-3 to lower rates to a range of 3.5% to 3.75%. Two of the dissentions advocated no change in interest rates while a third wanted a 0.50% reduction. This … Read more
How will today’s outcome of the Fed meeting be interpreted? Most are expecting the dissention could be great between the hawks and the doves, amplified by political pressures. Many believe the potential incoming Fed Chairman may have a political bias, a poor posture given that the Fed is expected to remain free from political biases. … Read more
Markets were quietly nervous yesterday as many are uncertain over the pace of easing in 2026. Wariness is also growing about the sustainability of a further AI driven rally. Kevin Hassert, a top candidate to take over the role of Fed chair, said it would be irresponsible for the Federal Reserve to lay out a … Read more
