Research & News
Daily Comment (June 18, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Happy Monday! It’s a risk-off day so far this morning. Here is what we are following: Tariffs and trade: While there wasn’t any major news on this issue over the weekend, financial markets are discounting the potential outcome of a trade war. Although there are legitimate… Read More »
Asset Allocation Weekly (June 15, 2018)
by Asset Allocation Committee The last topic in our series on secular trends is the dollar. It is arguable as to whether or not exchange rates are actually an asset class. In our asset allocation, we don’t treat it as one. On the other hand, the behavior of the dollar affects most of the other asset… Read More »
Daily Comment (June 15, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s Friday, the close of a very busy week. Today will be active, too. Here’s what we are following: Tariffs: As expected, the Trump administration leveled tariffs on $50 bn of Chinese imports this morning. The action will be broken into two tranches; the first set,… Read More »
Daily Comment (June 14, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s ECB decision day! The World Cup also begins today in Russia. It’s also Flag Day and President Trump’s birthday. The financial markets are trying to figure out if the Fed was hawkish or not. Here is what we are watching today: ECB: The European Central… Read More »
A Primer on Fiscal Policy, Government Debt and Deficits (June 13, 2018)
by Bill O’Grady & Mark Keller | PDF In our travels we are almost always asked about the government debt and deficits. If there is any area of confusion and misunderstanding, public finance could easily top the list. In response to these persistent questions, we are publishing this Frequently Asked Questions paper to address some… Read More »
Daily Comment (June 13, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s Fed Day! Financial markets are quiet in front of the “festivities.” Here is what we are watching: The Fed: We did a deeper dive in yesterday’s comment using the Mankiw models, but there are a few other important items. First, in the statement, there are… Read More »
Daily Comment (June 12, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Although the news is historic, the market reaction is very quiet. Most likely, the financial markets are much more interested in what the FOMC does rather than the meetings in Singapore. Here is what we are watching: Singapore: To some extent, the odds favored a meeting… Read More »
Weekly Geopolitical Report – China’s Foreign Reserves: Part II (June 11, 2018)
by Bill O’Grady In the first part of this report, we discussed the evolution of foreign reserves from gold to the dollar, with a historical focus. This week, we will use the macroeconomic saving identity to analyze the economic relationship between China and the U.S. Next week, using this analysis, we will discuss the likelihood that… Read More »
Daily Comment (June 11, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Happy Monday! It’s going to be a busy week. The Federal Reserve meets this week. The president is having his historic meeting with Kim Jong-un. On Friday, we are expecting details on the steel and aluminum tariffs. Here is what’s happening today: Kim and Trump in… Read More »
Asset Allocation Weekly (June 8, 2018)
by Asset Allocation Committee This week, we examine commodities in our fourth installment on secular trends. Commodity prices challenge the notion of “secular.” This chart shows a trend model for real (inflation-adjusted) commodity prices, represented by the Commodity Research Bureau (CRB) commodity index, deflated by CPI. We prefer this commodity index for its long history (over… Read More »