Tag Archives: federal reserve

Consumers Power Ahead; Businesses Disappoint

Consumers jumped on discounts and credit to leverage their incomes in November, with spending slightly outpacing solid, inflation-adjusted, disposable income gains during the month. Spending on big-ticket vehicles and holiday gifts both bounced back

The First Step

Federal Reserve Chair Janet Yellen successfully corralled the cats, achieving a unanimous vote by the Federal Open Market Committee (FOMC) to lift the fed funds rate by one quarter point to a range between 0.25% to 0.50%. The unanimous vote came with a compromise. The FOMC reinstated a form of forward guidance, stating that the [...]

CPI Firms Year-on-Year

The Consumer Price Index (CPI) flattened out the during the last two months as falling prices at the gas pump pulled down the overall index once again. However, we are finally starting to see some firming on a year-over-year basis with the CPI edging up 0.5% from a year ago. The reason is that we [...]

Yellen’s Big Test

Yet another round of market jitters, triggered by plummeting oil prices (OPEC has lost control of the oil market) and related problems in the high-yield bond market have raised questions about whether the Federal Reserve will actually pull the trigger and finally lift short-term interest rates from the zero bound. The moves we saw overnight [...]

Employment Gains Cinch Liftoff

Payroll employment jumped 211,000 in November and was revised up significantly for October and September. Gains were broad-based. The only major exceptions were mining, which continues to be hammered by low oil prices, and manufacturing, hit by the strong dollar and overhang of inventories. The good news is that the economy is more than absorbing [...]

Employment Data Forecast for November

Payroll employment is expected to rise by 185,000 in November after surging a surprising 271,000 in October. That would bring trend job creation close to a 200,000 norm. Private employment is expected to increase by 180,000,

Consumers Make Trade-offs

Real disposable incomes rose 0.4% in October, slightly faster than September, while inflation-adjusted spending rose a tepid 0.1% during the month, weaker than September, which was actually revised down. The saving rate picked up, but something more than caution alone appears to be happening.

Fed Ready to Raise Rates: Decision not Unanimous

The minutes to the Federal Open Market Committee (FOMC)’s October meeting revealed the ongoing debate over the timing of the first rate hike and concerns about communications. The majority of members was either ready to move or believed that they would be able to move in December. There was significant pushback by two members

Listen for Dissonance or Harmony from the Fed

The key question when the minutes of the Federal Reserve’s October meeting are released today will be how far Chair Janet Yellen’s legendary gift of persuasion worked, particularly within her inner circle.

Inflation Offers Fed Confidence

The Consumer Price Index (CPI) rose 0.2% in October compared to one month ago and one year ago. Core (nonfood and nonenergy) inflation also rose 0.2% as the drag from energy prices abated and the push from medical care services intensified.