Research & News
Asset Allocation Weekly (April 18, 2019)
by Asset Allocation Committee Why is inflation so low? The persistence of low inflation, despite the long expansion and the decline in unemployment, continues to befuddle policymakers. Standard economic theory suggests there is an inverse relationship between inflation and unemployment. When the unemployment rate is low, firms should be experiencing reduced excess capacity. As capacity is… Read More »
Daily Comment (April 18, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] U.S. equities are mostly flat, while we are seeing weakness abroad. The Mueller report[1] gets released this morning, so the media will be focusing on that all day. European PMI data was lackluster.[2] In a fascinating development, a Democratic Party stalwart announced he isn’t running… Read More »
Asset Allocation Quarterly (Second Quarter 2019)
The Federal Reserve shifted fully from its hawkish stance at the beginning of the year. We anticipate that the committee will maintain its newly dovish stance with the potential for further monetary accommodation. Though the employment/population ratio has improved, we find it still indicates slack in the labor force, blunting the full impact of wage… Read More »
Daily Comment (April 17, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Equities are trending higher in a quiet trade. China’s economic data was solid. Here is what we are watching: Chinese data: GDP came in a bit better than expected, at 6.4%, but since GDP is mostly a manufactured number we expect it to always be… Read More »
Daily Comment (April 16, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Equities are trending higher in a quiet trade. Media is focused on the tragic Notre Dame fire. Here is what we are watching: Fed talk: Chicago FRB President Evans and Boston FRB President Rosengren (both voters this year) made essentially dovish statements on monetary policy. … Read More »
Weekly Geopolitical Report – Reflections on Domestic Policy and American Hegemony: Part I (April 15, 2019)
by Bill O’Grady (Due to the Easter holiday, our next report will be published April 29.) The dollar is the world’s reserve currency. As such, there is a constant demand for dollars from foreign countries to provide liquidity for global transactions. Because of the reserve currency status, U.S. monetary and fiscal policy affects the world economy… Read More »
Daily Comment (April 15, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Happy Tax Day! It’s a quiet start to a short week. Here is what we are watching: A Chinese anniversary: This is the 30th anniversary of the death of Hu Yaobang, a reformist leader in the late 1980s. Deng had supported the rise of Hu,… Read More »
Asset Allocation Weekly (April 12, 2019)
by Asset Allocation Committee The employment data is closely watched by financial markets; although the data isn’t necessarily a leading indicator for the economy, it is probably the most important from a political and social perspective. Weak employment data is a worry for political incumbents and concerning to policymakers. However, beyond the headline data, there are… Read More »
Daily Comment (April 12, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] We are seeing a risk-on day. Other than this sentence, there will be no discussion of Brexit today. Here is what we are watching: Chinese data: Bank loans rose much more than expected, with CNY 1.69 trillion extended compared to expectations of CNY 1.25 trillion. … Read More »
Daily Comment (April 11, 2019)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Lots of news this morning. Here is what we are watching: Assange arrested: The Ecuadorian government has removed Julian Assange’s asylum status and he has been arrested in London.[1] We expect him to eventually be extradited to the U.S.[2] Assange is a controversial figure; Wikileaks… Read More »