Tag Archives: Fed Policy
How to Stop Worrying about Inflation
Inflation in the US averaged 1.5% annually for the last five years with a peak of 2.9%. Despite today’s low and stable inflation numbers, anxiety that the price level will leap up is driving a search for the reasons it seems low. Today’s inflation is a bit lower than the average since 1914 of 3.2%…
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Sea Change at the Fed
Today’s Fed announcement keeping the Fed funds target range at 2.25% to 2.5% was more than simply leaving rates unchanged for the moment. Behind the headlines are changes in their expectations for inflation and the economy and adjustments in their operating procedures: The FOMC will be patient as it determines what future adjustments to the…
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Low Inflation isn’t Unusual
Fed watchers and bond holders worry that inflation could spike, tempting the Fed to boost rates much farther than the current half percentage point the market expects in the rest of 2018. With the Federal Open Market Committee, the central bank’s policy makers, meeting today and tomorrow these concerns are front and center. This morning’s…
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Rising Rates Arrive
Which of the figures below belong together? It’s obvious, even if analogies aren’t your strong suit, that A is like C and B is like D. A and C are not like B and D. The economic relevance of this simple visual exercise is this: At its March 2017 meeting, the Federal Open Market…
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2017, defensive strategies, equities, Equity, Factor, Fed Funds Rate, Fed Rate Policy, Federal Funds Target Rate, Federal Reserve, Fei Mei Chan, high beta, Higher Interest rates, Index Investment Strategy, institutional investor, interest rates, low volatility, Raising Fed Funds, rising rates, risk, S&P 500, S&P 500 (TR), S&P 500 High Beta Index, S&P 500 Low Volatility, S&P 500 Low Volatility High Dividend Index, smart beta, stock, U.S. Federal Reserve
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- 2017, defensive strategies, equities, Equity, Factor, Fed Funds Rate, Fed Rate Policy, Federal Funds Target Rate, Federal Reserve, Fei Mei Chan, high beta, Higher Interest rates, Index Investment Strategy, institutional investor, interest rates, low volatility, Raising Fed Funds, rising rates, risk, S&P 500, S&P 500 (TR), S&P 500 High Beta Index, S&P 500 Low Volatility, S&P 500 Low Volatility High Dividend Index, smart beta, stock, U.S. Federal Reserve
Waiting for the Fed
The Fed’s policy makers, the FOMC, meet on December 15th and 16th and are widely expected to raise the target Fed funds rate for the first time since 2006. The odds of a 25 bp increase in the target range to 25-50 bp is about 77% based on Fed Funds futures. There are two key…
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The Fed and the Debt Ceiling
Two distractions creating uncertainty for the treasury market right now are the debt ceiling and who said what at the Fed. Both annoyances should fade away, one in a few weeks, the other possibly not until sometime in the first half of 2016. The debt ceiling law dates back to shortly before the Second World…
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Why So Many Worry About Inflation
Inflation fears are everywhere except in the data. While the Fed keeps reminding us that the inflation rate is below their 2% target, analysts keep arguing that the Fed will be miss signs of inflation. Any hint of rising prices anywhere – from the CPI to oil to the money supply – is highlighted while…
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Inflation Fears and the Fed
Last week’s Consumer Price Index (CPI) release spooked a few people with a month to month change of 0.4%, the largest since February 2013; food prices were up 0.7% and the CPI ex-food & energy up 0.3% with both rising the most since August, 2011. To top it all, the twelve month change in the…
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