The Inverted Yield Curve: Fair Warning or False Alarm?

Recession fears soared last week because of something called an inverted yield curve which exists when investors shift their cash from shares into the relative safety of government bonds. That drives the price of bonds up, and, the flip side, interest rates down. Since recessions last a while, investors, when fearing a recession, prefer longer-term […]

Powell Cuts, Trump Wants More, Who Needs The Fed Anyway

It is rare that a chairman of the Federal Reserve Board can give a routine speech confirming a widely anticipated and minor interest-rate change and, rather than produce a yawn, precipitate the steepest one-day share-price plunge since May, and a rise in the dollar to a two-year high against six major currencies. Jay Powell accomplished […]

The Congress Runs Up Deficits, The Fed Runs Down Rates

Recoveries don’t die of old age. They are murdered by policymakers. That was true in the 1930s, and it may well be true these many years later. Post mortems are likely to discover that the politicians and the Fed will turn out to be partners-in-crime, the politicians by drowning the recovery in red ink, the […]

Powell Speaks, Congress Listens, The President Fumes

His appearances before a pair of congressional committees last week were the least of Federal Reserve Board chairman Jay Powell’s problems. His reputation for candor and the individual and small-group meetings he has held with 116 congresspersons in his 16 months in office assured a respectful reception and protection from a president threatening to fire […]

224,000 New Jobs in June Produce New Worries on Wall Street

This month marks the start of the eleventh year of an economic expansion that began at the end of the last recession. That surpasses the previous record for growth, set in the 1990s. The economy grew at an annual rate of 3.1% in the first quarter. The unemployment rate is at a 50-year low. Inflation […]

The President Rails, The Chairman Dons Ear Muffs

Who says Americans are deeply divided on all issues? Not true. Both the President and the hard left, including a new group, Employ America, agree that the Federal Reserve should cut interest rates, a lot and soon. But the Fed, led by chairman Jay Powell is not ready, at least not yet, to lower rates. […]

The President Holds the Fed Chairman Prisoner

Yes, we wish it had been more vigorous. But longevity is nothing to sneer at. This month the current US economic expansion will be 10-years old, and by next month the longest on record. That compares with an average of less than five years for all post-WW2 expansions. During this expansion, the economy has added […]

It’s Up to Capitalists to Save Capitalism

Capitalism is under threat. No, not from Xi Jinping and his alternative model, an economy managed by a Communist Party elite that has no use for such things as market forces and dissenting voices. America has in the past seen off threats from alternative systems – Mussolini’s Fascism, Hitler’s National Socialism, Lenin and Stalin’s Communism, […]

The Burden of Debt

Both ends of the political spectrum have become increasingly cavalier about debt. They may live to regret it. A spectre is haunting the world. No, not communism, which can’t even find a home in Russia. The spectre is debt. The creditor class has nothing to lose but its Kapital, and the bourgeoisie nothing to lose […]

A Goldilocks Economy That Trump Wants Hotter

Disaggregate. That’s what to do when a bit of economic data is released and proves so pleasing to the administration that all the President’s men, persons, these days, hie to the television studios to claim it’s all due to the shrewd economic management of their boss. Which is what happened when the government’s advance estimate […]