Fear of increasing inflation in the U.S. appear to be the trigger behind the market volatility of previous weeks. Recent gains in hourly compensation to workers have had analysts measuring the effect of wages on inflation. In turn, analysts began pondering changes in Fed's monetary policy due to the apparent overheating path of the economy; … Continue reading Rent Prices Stickiness and the Latest CPI Data.
The stock market seems to be returning to the old normal of higher levels of volatility. I suggested on Tuesday that former Fed Chairman Alan Greenspan’s comments could have brought back volatility by triggering the Dow Sell-off on Monday, February 5th. As I wrote early in the week, I believe that we should observe some panic manifestation … Continue reading Timorous evidence of “Contagious Effect” after Dow Sell-Off.
Although the Federal Open Market Committee (hereafter FOMC) March’s meeting on monetary policy focused on what apparently was a disagreement over the timing for modifying the Federal Bonds interest rates, the minutes indicate that the disagreement is not only on timing issues but also on exchange rate challenges. Not only does the Fed struggle with … Continue reading Unemployment √. Inflation √. So… what is the Fed worrying about?
The puzzling aspect of recent data on inflation has been the deflation trajectory forged by oil prices. The index on energy by itself has fallen 28.7 percent over the year. Just in January 2016, the energy index declined 2.8 percent as gasoline index did so by 4.8 percent during the same month. The energy index … Continue reading A set of possible negative US economic shocks.
Data on both unemployment and prices have monetary policy analysts wondering whether or not the US supply side of the economy is heading towards overheating. Thus far, indicators on industrial production and capacity utilization show there is still room for the economy to advance at a good pace without risking too many resources. Such indicators … Continue reading “Core” inflation might be reflecting pressures solely generated by retailers.
Second Estimates for real GDP growth in the United States indicate that the economy grew at 3.7 percent during the second quarter of 2015 after correcting by price change. The report from the Bureau of Economic Analysis informs that the change mainly derived from positive contribution of consumer spending, exports, and spending of state and … Continue reading “Core” inflation rate will have huge influence on monetary policy next month.
After a year of declining crude oil prices which forged price spillovers all over the US economy, it is time for economists to look at price changes without accounting for the petrol effect. So far, 2015 has been a year in which dropping gas prices have affected almost every index from the US Bureau of … Continue reading It’s time to look at price changes without accounting for oil price effect.
What can we infer from today’s Federal Open Market Committee decision? Today’s Federal Open Market Committee (FOMC) decision corresponds to Fed’s previous statements about the current state of U.S. economy. First, data inputs on Capacity Utilization led timidly FOMC to insights on industry output gap. Second, the Beige Book clearly illuminated onto issues related to … Continue reading What could you infer from 06/17/15 Federal Open Market Committee decision?
The “Strong Dollar” factor: “Strong Dollar” is said to be one of the main causes explaining the poor economic performance of the United States during the first quarter of 2015. United States’ exports were affected by the appreciation of the currency vis-à-vis some of the foreign currencies. Likewise, exports towards the United States benefited from … Continue reading Is the Current U.S. Dollar Strong All Over the World?
2014 showed no excitement in monetary trends, generally speaking. Besides the Federal Reserve’s Quantitative Easing program (QE), the pockets where the American money is remained mostly stable. The interesting changes were in the first pocket which comprises currency that circulates on the streets (Households). This pocket grew in one year 9.6% (from November 2013 to … Continue reading Fed may get monetary policy mussel back in 2015.