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The BLS employment report showed that job growth has finally normalized to pre-pandemic levels. Per the employment report, 187k new jobs were added, slightly below the 200k expectation. Such is the lowest monthly job growth since December 2020. The unemployment rate ticked down from 3.6% to 3.5%. Hourly wages were up slightly, but hours worked […]
Ten and 30-year U.S. Treasury bond yields rose sharply, with their yields piercing 4%. The driver was a change in the Bank of Japan’s (BOJ) monetary policy. The BOJ adjusted how they manage yields, aka yield curve control (YCC). They will now conduct YCC via “flexible” operations. Before the flexible stance, the BOJ had a […]
Economics
While Washington continues a seemingly unbridled spending spree under the assumption “more spending” is better, debts and deficits matter. To better understand the impact of debt and deficits on economic growth, we must know where we came from. The chart shows the 10-year annualized growth rate of the economy over time. What should immediately jump […]
Remember PacWest? Following the demise of Silicon Valley, Silvergate, and Signature banks in March, PacWest Bank was on the ropes. Many investors feared it would be the next domino to fall and other larger regional banks may follow, thus worsening the banking crisis. PacWest shares hit a low price of $2.48 on May 4th, well […]
Over the last thirty years, the Fed has relied on lower interest rates to pump the economy when it slowed. Lower rates helped wide swaths of the economy. But quite often, the most immediate benefit was from the housing market. Lower rates made housing more affordable, thus increasing the ability for potential buyers to buy […]
“Despite the slowing recovery in tourism in the region overall, one contact highlighted that May was the strongest month for hotel revenue in Philadelphia since the onset of the pandemic, in large part due to an influx of guests for the Taylor Swift concerts in the city,” The quote is courtesy of the Philadelphia Fed’s […]
The recent New York Fed Credit Access Survey report shows consumer borrowing is becoming more difficult. As we have been discussing for a few months, the fallout of the March regional banking crisis and the inverted yield curve is causing banks to tighten lending standards. The Fed report is based on a survey taken every […]
Invest
The volatility index is so low it has to go higher eventually. Such seems obvious, but this year, despite the banking crisis, higher interest rates, and slowing economic data, investors continue to abandon hedges amid bullish optimism. But what exactly is the volatility index, more commonly called the “VIX,” and why does it matter? “The […]
Yesterday’s Wall Street Journal led with a troubling article on Europe’s economy. Their article, Europeans are Becoming Poorer, leads off as follows: “The French are eating less foie gras and drinking less red wine. Spaniards are stinting on olive oil. Finns are being urged to use saunas on windy days when energy is less expensive. […]