Research & News
Asset Allocation Weekly (July 14, 2017)
by Asset Allocation Committee One of the mysteries of this expansion has been the slow pace of wage growth. Despite the plethora of evidence that labor markets are tight, including hires-to-openings ratio below one, low unemployment, low initial claims and a low unemployment rate, wage growth has remained stunted. The chart below is one we have… Read More »
Daily Comment (July 14, 2017)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] The CPI data came in weaker than expected, sending the dollar and Treasury yields lower. We examine the data in the context of policy using our Mankiw model variations below. Outside the inflation numbers, here are some of the other news issues we are tracking this… Read More »
Daily Comment (July 13, 2017)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Here’s what we are watching today: Yellen, Round 2: There was nothing in Yellen’s testimony that differed from her opening statement which the markets took as dovish. Our comments yesterday appear to be mostly confirmed; the FOMC is shifting to emphasizing balance sheet reduction and less… Read More »
Daily Comment (July 12, 2017)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] The Chair speaks: The text of Chair Yellen’s comments has been released in front of her testimony to Congress. Market reaction is consistent with a dovish stance. Here is the excerpt that is probably triggering the weaker dollar/stronger equities/stronger Treasuries/higher gold trade: …based on our view… Read More »
Daily Comment (July 11, 2017)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s another quiet summertime morning. Here are the headlines we are watching: It’s official—Randal Quarles is likely the newest Fed governor: The Trump administration formally nominated Quarles for the chair vacated by Dan Tarullo. His name has been in the media for several weeks, so the… Read More »
Weekly Geopolitical Report – The Mid-Year Geopolitical Outlook (July 10, 2017)
by Bill O’Grady As is our custom, we update our geopolitical outlook for the remainder of the year as the first half comes to a close. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international landscape for the rest of the… Read More »
Daily Comment (July 10, 2017)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Happy Monday! It’s officially mid-summer as baseball’s All-Star Game will be held tomorrow. Global markets are rather quiet this morning. Here are the headlines: G-20: The U.S. is becoming steadily isolated in the world as per the design of the Trump administration (and, to be fair,… Read More »
Asset Allocation Weekly (July 7, 2017)
by Asset Allocation Committee One of the relationships we persistently monitor is the expectations of 10-year Treasury yields compared to the actual level of yields. To do this, at the beginning of each year, we plot the rate forecasts from the Philadelphia FRB’s Professional Forecaster Survey. The record of the forecasters has not been stellar. The… Read More »
Daily Comment (July 7, 2017)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Happy employment day! The employment data is covered in detail below but the snapshot of the data is supportive. Payrolls rose 222k compared to forecasts of 178k; we also saw a 47k upward revision, making the report robust. The unemployment rate came in at 4.4% versus… Read More »
Daily Comment (July 6, 2017)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s a fairly quiet morning, typical of mid-summer. Here are the issues we are watching: Fed minutes: Most of the media recaps focused on the reduction of the balance sheet. As we have noted in the past, in theory, this action shouldn’t be a big deal. … Read More »