The Federal Reserve made no changes to monetary policy today and it barely changed the language of its statement. That makes sense to us because we haven't changed our outlook for monetary policy or the economy, either. The investor consensus, the Fed, and our view are all agreed that the Fed will raise twice more [...]
Paul Krugman, Larry Summers and Bob Gordon have some 'splainin to do. Where's that "secular stagnation?" Since 2009, they, along with many others, have said the US economy is stuck at 2% real growth. Their theory got traction after 2009, as the U.S. saw what we called a Plow Horse Economy. But, we never believed [...]
The yield spread between the 2-year and 10-year Treasury Note has narrowed to 25 basis points, its smallest spread since 2007. This has many investors worried the narrowing spread will lead to an inversion of the yield curve (when short-term rates exceed long-term rates) – which throughout history has often occurred prior to a recession. [...]
At least three reasons suggest the Democrats should be optimistic about taking control of the House this November. First, the party controlling the White House typically loses seats in mid-terms. These include "tidal waves" against the president's party like in 1994 and 2010, when newly-elected presidents Bill Clinton and Barack Obama watched their parties lose [...]
For decades, investors have feared the national debt growing to unsustainable levels and destroying the US economy. Back in 1981, the public debt of the federal government was $1 trillion; today it's more than $21 trillion. At some point, their theory goes, additional debt is going to be the fiscal straw that breaks the camel's [...]
From mid-2009 through early 2017, the US economy grew at a real average annual rate of 2.2%. Not a recession, but not robust growth either, which is why we called it a Plow Horse Economy. For the first quarter of 2018, we expect growth of 1.9% at an annualized rate, right in-line with a Plow [...]
Stock market volatility scares people. But, volatility itself isn't necessarily bad. Only if there are fundamental economic problems, something that could cause a recession, would we think volatility itself is a warning sign. So, we watch the Four Pillars. These Pillars – monetary policy, tax policy, spending & regulatory policy, and trade policy – are [...]
In the history of the NCAA Basketball Tournament, a 16th seed has never, ever, beaten a one seed...until this year. But, on Friday, the University of Maryland, Baltimore County (UMBC) beat the University of Virginia – not just a number one seed, but the top ranked team in the USA. We don't expect the unexpected, [...]
The current recovery started in June 2009, 105 months ago, making it the third longest recovery in U.S. history. The longest – a 120-month recovery in the 1990s – saw real GDP expand an annual average of 3.6%. The current recovery has experienced just a 2.2% average annual growth rate – what we have referred [...]