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2018 Commentaries

The FOMC has a serious communication problem when it comes to symmetry

Definition of symmetry: The quality of being made up of exactly similar parts facing each other or around an axis. Correspondence in size, shape, and relative position of parts on opposite sides of a dividing line or median plane or about a center or axis. ———— The FOMC has gone out of its way recently […]

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Monday reading and a programming note

It’s not often that I read a WSJ editorial and think – “WOW…that was fantastic”. But it happened with this piece from the weekend: I highly recommend talking the time to read it. And once you finish, please have a (re)read of the “Secular Stagulation” piece I wrote back in Feb 2017. It is […]

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Get ready for the “Fed Deep State” Tweet

I cannot imagine anyone realistically thought that opining on Fed policy would be off limits for Trump. He has managed to push the boundaries of traditional Presidential commentary on virtually every policy front – why should monetary policy be the exception? In fact, if his response last week to the question on CNBC about the […]

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Non-Accurate Ideology Rendered Useless - NAIRU

Today’s payroll data is yet another punch in the gut to those arguing for a sharp rise in inflation pressures. Wage growth came in 0.1% below consensus at the same time payroll growth beat expectations handsomely. The rise in the participation rate, and the unemployment rate, tells us there still exists plenty of labor market […]

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Fade Trade & Fade Angie

Last week was yet another lesson in trade fading. Threats of US tariff increases on $200b of Chinese goods, along with a proposed 20% tariff on car imports from Europe, caused the markets to wobble for a few hours. Then of course the perfunctory fading began. I’m not going to rehash my longstanding “fade trade” […]

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A whole lotta nothing...

I would characterize todays’s FOMC announcement as essentially meeting slightly hawkish expectations. Here is what we learned: No changes to estimates of the NAIRU or r-star. There were some very small tweaks to the path by which we get to equilibrium though. And with one dot moving the needle, the median forecast has now gone […]

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