Making eurodollar futures interesting is not among Fed chair Jay Powell’s goals, but he’s achieved it nonetheless. From just after their June FOMC meeting through Thursday, the market has lopped over 0.50% off the projected rate cycle. The cycle peak has even been brought forward, from March 2023 to this coming December. The FOMC’s Statement of Economic Projections (SEP) has rates peaking at the end of next year, a forecast Powell described as “probably the best estimate of where the Committee’s thinking is still.”
At the end of 2019, Federal Debt outstanding was $23.2 trillion. Of course, three months later, the government would decide to shut down the economy to battle the COVID-19 outbreak. That decision was the defining moment that implemented MMT policy with successive rounds of monetary stimulus from direct checks to households to expanded government subsidies. By the year-end of 2021, Federal Debt swelled to nearly $30 trillion. Such is the most significant increase in government spending in U.S. history.
At the end of 2019, Federal Debt outstanding was $23.2 trillion. Of course, three months later, the government would decide to shut down the economy to battle the COVID-19 outbreak. That decision was the defining moment that implemented MMT policy with successive rounds of monetary stimulus from direct checks to households to expanded government subsidies. By the year-end of 2021, Federal Debt swelled to nearly $30 trillion. Such is the most significant increase in government spending in U.S. history.
Basic economics says that companies can only set prices at a level where the current supply will meet demand. Moreover, looking at prices in a vacuum is also very misleading because it doesn’t account for changes in the firm’s input or operating costs.
Basic economics says that companies can only set prices at a level where the current supply will meet demand. Moreover, looking at prices in a vacuum is also very misleading because it doesn’t account for changes in the firm’s input or operating costs.
Are recession risks fully “priced in” by the markets? Such was an interesting question asked recently by my colleague Albert Edwards at Societe Generale.
For months, investors have been scaling what feels like an endless wall of worry. Each concern that gets resolved seems to spawn new uncertainties, yet the market has continued its relentless climb higher.
We’ve lived this movie before. Last August, AAII bullish sentiment struck a 52-week high right before the Fed launched its September rate cutting cycle.
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