The Fed removed its handcuffs on banks, allowing them greater flexibility to trade and hold crypto assets. Before Thursday’s action, banks were asked to seek advance approval from the regulators before participating in crypto-related activities. Further, the Fed removed guidance that banks exercise caution with crypto due to its volatility, liquidity, and legal uncertainty. The […]
Despite a growing chorus of pundits claiming the “death of the dollar” is imminent, Treasury Secretary Scott Bessent said the dollar will remain the world’s reserve currency. The following clip from Bloomberg was based on a speech Scott Bessent gave Thursday morning to the IMF and World Bank: More broadly, the Treasury secretary reinforced backing […]
Monday’s Commentary started: On Truth Social, President Trump stated, “Powell’s Termination Can’t Come Fast Enough!” The stock and bond markets fell as investors feared President Trump might try to remove Powell from his role as the Chairman of the Federal Reserve. This isn’t new ground; Trump spoke similar words during his first term. However, with […]
Since the start of the year, the S&P 500 is down over 10% and nearly 20% from its January peak. At the same time, gold is up almost 30%. The stark return differential is excellent news for gold investors, but the clock may be ticking on gold’s outperformance versus stocks. For historical context of prior […]
Economic and inflation forecasts have a highly significant impact on treasury bond yields. Therefore, one would suspect that their yields would follow a linear trend as the maturity lengthens on Treasury securities. For example, if current expectations were for high growth and higher than normal inflation but long-term expectations were contrary, one would expect a […]
On Truth Social, President Trump stated, “Powell’s Termination Can’t Come Fast Enough!” His comment, posted early Thursday morning, followed a speech by Jerome Powell on Wednesday afternoon. Unlike the ECB and other central banks that are cutting rates, Powell and the Fed hesitate to do so. Despite expectations for lower economic growth, they worry that […]
Recent consumer sentiment readings have been horrendous. For instance, the University of Michigan’s latest consumer expectations and the Conference Board’s consumer confidence index are at or near their lowest levels in ten years. However, despite poor sentiment and concerning outlooks, recent consumer spending reports show increased spending. We, and many economists, believe this is a […]
The chart below, courtesy of JP Morgan Asset Management, highlights how much the US relies on certain rare earth metal imports from China and other nations. It also lists some of the products the metals are needed for. As the chart shows, imports play a critical role in securing our rare earth metal needs. Furthermore, […]
Despite, or actually because of, the recent market turmoil, many large banks and brokers reported better-than-expected earnings. Market volatility provided a nice boost to trading revenue, which helped offset weakness in other business lines. Goldman Sachs, reporting earnings on Monday, said their equity trading revenue rose 27% from the prior quarter. JP Morgan and Morgan […]