Today’s economy has often been called the Goldilocks economy: it’s not too slow or fast, it’s just about right. Economic Goldilocks today is manifested by persistently low inflation, interest rates and unemployment with simultaneous strong economic and income growth. After a record setting 10 year growth phase, the US is…
Virtually every week this year confidence of a major trade agreement between the US and China has grown. Just a few days ago Trump surrogates spread rumors that a deal would be announced in a week. Suddenly, a lack of progress on trade deal enforcement terms has triggered Trump to…
In 2018 the US economy expanded beyond its sustainable production capacity, juiced by massive tax cuts and global preordering ahead of Trump’s tariff hikes. As winter approached we warned that the recession Bears would become more vocal as Europe edged closer to an economic contraction and the Fed induced equity panic coincided with…
The stock market discounts future expectations. The roaring rally of the past 14 weeks has cast aside recession ruminations and increasingly anticipates an economic rebound coincident with an important trade agreement with China. The benchmark SP 500 Index of stocks has just completed its best quarterly gain since 2009 and the…
Normal economic expansions are supported by positive sloping yield curves where riskier long duration maturities offer higher rates of return than lower risk short duration debt. Investor aversion to an inverted yield curve, where short term rates are higher than long term, is tethered to an assumption of credit tightening that is pricing in…
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