Correspondent Blog

Team Transitory Stands Down It seems you can retire the word transitory from your vocabulary, or at least from the Fed playbook, as Fed Chair Powell declared yesterday in testimony to the Senate Banking Committee.  Powell and Treasury Secretary Janet Yellen were there as required by the CARES Act to update the committee on the…

Markets Reconsider Worst Case Virus Scenario Investors are reconsidering the worst case virus scenario from the new South African variant and that has Treasuries giving back some of their gains from Friday and stocks looking to recapture some  of the losses suffered that day. South African health experts, including the doctor who first went public…

Thanksgiving Week Arrives with Plenty on the Plate With the Thanksgiving holiday on Thursday, and plenty of people taking the whole week off, it still holds plenty of intrigue. It’s just a matter of who will be around to react to it?  The first matter of business will be whether the Build Back Better Bill…

Are Accelerating Wage Gains the Next Inflation Risk? Team Transitory at the Fed continues to doggedly persist in the labeling of supply-constrained price increases as temporary; albeit, with a longer timeline to reverse the trend than was assumed earlier in the year. While we tend to agree with that view, the Fed also has an…

Hot Retails Sales Turns Up the Heat on the Fed The heat on the Fed is only being turned up lately. First, it was last week’s October CPI numbers that had inflation on the tips of everyone’s tongues. Now it’s a hotter-than-expected retail sales report for October that seems to indicate that while consumers may…

Expect Plenty of Fed Speak on Inflation After the October CPI numbers last week there will be no escaping the topic for Fed officials that venture out into the public sphere. This week there are nine such officials speaking and their views on inflation, and what the Fed will do about it, will be front…

October CPI Report Changes Narrative for the Fed The October CPI report has set an uncomfortable narrative for the Fed as we approach year-end and that new narrative will make it harder for them to preach patience in the face of the highest inflation readings in 30 years. While Powell and his fellow governors likely…

October CPI, Fed Speak, and Budget Bill Madness This holiday-interrupted week (Veterans Day on Thursday) will be headlined by the latest inflation data. With the October jobs report posting strong numbers, and with impressive wage gains, investors will be casting a weary eye on the CPI numbers. The Fed has planted their flag squarely in…

October Jobs Report to Inform on the Timeline to Reach Full Employment The October employment report will be released at 8:30 am ET this morning and it will be a key piece in refining the timeline to full employment which, in turn, will most likely guide when interest rate hikes begin. The median Bloomberg expectation…

Fed Meets to Decide Taper While Investors Look to Rate-Hiking Guidance The Fed has a tough job. That is abundantly clear to all that cover financial markets, or work in them in some shape or form. With the Fed concluding its FOMC meeting today, and an official tapering announcement expected, the bigger question is when…

FOMC Taper Decision and October Jobs Report We have finally arrived at the FOMC meeting that should unveil the Fed’s plans on tapering quantitative easing purchases. Meanwhile, the market has moved on to other matters, as in how fast will tapering be accomplished and when will rate hikes begin? Fed Chair Powell stated at the…

Disappointing Third Quarter GDP Points to Better Fourth Quarter Third quarter GDP came out yesterday and at 2.0% quarter-over-quarter annualized disappointed versus the 2.6% expectation. The seeds, however, look to have been sown such that fourth quarter GDP has a chance to post something closer to 5%. The fingerprints of supply chain disruptions and rising…