Long-term rates slid suspiciously last week -- still in-range, but an up-trend based on Fed threats has stopped dead. Markets got little new data to chew on, core consumer price indices, if anything, dipping (up only 0.1 percent in September), housing starts and sales continuing a slow-ish pattern. Many in markets mention a trading pause caused by politics, an intake of breath waiting for the conclusion of this strange year. Anxiety that The Donald might actually be elected is now gone altogether, but replaced by concern that the Democrats might sweep Congress. For whatever reason, strangely quiet. What's the Fed saying about its rate control? In the cacophony of market “analysis” out there, I cannot too strongly recommend reading the Fed’s own commentary. Not from its regional banks, but the Chair, the Vice Chair, and Governors. Last week, Vice-Chair Stanley Fischer delivered a beauty, which (among other things) should embarrass the regional hawk-flock into silence...
- Many in markets mention a trading pause caused by politics, but the Fed's own words tell a different story.
- Vice-Chair Stanley Fischer named four elements of economic "drag": a slower economy; then demography, workforce and aging; lower investment; and a slower outside world.
Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York