A rate hike at next month’s Fed policy meeting is still considered unlikely, but the probability of a surprise is creeping higher, based on Fed funds futures data.
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Monthly Archives: February 2017
REITs Rebound And Commodities Slump
US real estate investment trusts (REITs) scored a strong gain last week, posting the biggest return among the major asset classes, based on a set of exchange-traded products. Meantime, broadly defined commodities suffered the biggest loss for the shortened trading week through Feb. 24.
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Book Bits | 25 February 2017
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The Vanishing Middle Class: Prejudice and Power in a Dual Economy
By Peter Temin
Summary via publisher (MIT Press)
The United States is becoming a nation of rich and poor, with few families in the middle. In this book, MIT economist Peter Temin offers an illuminating way to look at the vanishing middle class. Temin argues that American history and politics, particularly slavery and its aftermath, play an important part in the widening gap between rich and poor. Temin employs a well-known, simple model of a dual economy to examine the dynamics of the rich/poor divide in America, and outlines ways to work toward greater equality so that America will no longer have one economy for the rich and one for the poor.
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Trumponomics vs. Economic Forecasts
Economic forecasting that’s largely informed by politics is a treacherous affair, but it may be unavoidable in the current climate. If you’re a Donald Trump supporter there’s a good chance that you’re anticipating stronger US growth. But if you voted for someone else last November, it wouldn’t be surprising to learn that you’re skeptical that a dramatic acceleration in the economic trend is near.
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A Bull Market For Junk Bonds As Interest Rates Rise
Federal Reserve official are considering another interest-rate hike, according to yesterday’s release of minutes for the Jan. 31-Feb. 1 monetary policy meeting. The hawkish tone offers another reason to remain cautious on Treasuries. But while the outlook for bonds generally is challenged as interest drift higher, one corner of fixed-income has been immune: junk bonds.
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Most Forecasters See Stronger US GDP Growth In Q1
The US economy is headed for a firmer expansion in this year’s first quarter, according to a range of forecasts. The outlook for a moderately stronger pace of economic activity follows a sluggish increase in GDP in last year’s fourth quarter. The futures market, however, continues to price in a high probability that the Federal Reserve will leave interest rates unchanged at next month’s monetary policy meeting.
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Modeling Risk With Bootstrapping Techniques In R
Limited data is the financial modeler’s biggest challenge. Making assumptions about risk is tough enough under the best of circumstances. All too often it’s even tougher when the historical record is thin. There are several ways to manage this challenge, including bootstrapping, aka resampling the available data to create historical records that might have occurred. Nothing’s perfect, of course, but bootstrapping can be a powerful tool for stress testing portfolios and developing robust assumptions about risk.
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US Stocks Rallied Last Week As Commodities Slumped
The US equity market was the top performer among the major asset classes for the trading week through Feb. 17, based on a set of representative exchange-traded products. On the flip side, broadly defined commodities tumbled, posting last week’s biggest setback.
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Book Bits | 18 February 2017
● Fed Up: An Insider’s Take on Why the Federal Reserve is Bad for America
By Danielle DiMartino Booth
Commentary by author via CNBC
It’s no longer a secret that an abundance of anger is churning among many working men and women who feel they’ve been excluded by the current economic recovery and the longest span of job creation in postwar history. The funny thing about a sense of abandonment is that more often than not, anger follows.
What too few Americans appreciate is how directly the inability to say “no” at the Fed has determined their station in life. But that’s just the case. The Fed directly impacts a slew of the most important decisions we make — the values we instill in our children, the things we buy and how they are financed and how we best prepare for what follows after a lifetime of laboring in the trenches.
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US Business Cycle Risk Report | 17 February 2017
Political risk may be on the rise, but the US economy began 2017 on a strong note. As projected in previous months, macro momentum has strengthened, pushing recession risk down to a virtually nil reading for January. Looking ahead, the near-term estimates through next month suggest that the favorable tail wind will continue.
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