The Federal Reserve is widely expected to raise interest rates again in June, a policy decision that looks set to further squeeze the Treasury yield curve. The spread between the 10-year and 3-month yield is already the smallest since last October and another rate hike could cut the difference even more.
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Strong Rebound Expected For US Q2 GDP Growth
The tepid rise in first-quarter GDP growth is on track for a sharp acceleration in Q2, according to estimates from several sources.
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Foreign Bonds Pop As US Dollar Stumbles
Foreign government bonds in developed markets roared last week, generating the strongest performances among the major asset classes, based on a set of proxy exchange-traded funds.
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Book Bits | 20 May 2017
By A. Coskun Samli
Summary via publisher (Palgrave Macmillan)
This book discusses the current landscape of our market economy, which is in the hands of financiers and billionaires who decrease competition as well as consumer power. In order for society to fully thrive and provide its members higher living standards and quality of life, it must distribute and deliver the fruits of the economic activity without discrimination and favoritism. This book exposes the real problem of economic inequality, poverty, and the elimination of the middle class and argues for a progressive market economy in the face of regressive conservatism. The author warns of business failures, rigid and unrealistic laws, widespread unemployment, and class warfare without a fair, functional system.
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US Business Cycle Risk Report | 19 May 2017
Political uncertainty for the US is on the rise, but economic risk remains low. The turmoil surrounding President Donald Trump raises questions about the viability of his administration’s pro-growth policy agenda. Nonetheless, it’s debatable if the economy is vulnerable due to elevated political risk, in part because there’s no sign of macro stress based on the numbers published to date.
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Mr. Market Demands A Bigger Discount For Political Risk
Political turmoil swirling around President Trump reached critical mass on Wednesday, triggering a selloff in the US stock market. One concern is that the administration’s pro-growth policy proposals are vulnerable if the White House is forced to address the chaos, much of it self-inflicted, that threatens to overwhelm Washington.
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The Limits Of One-Indicator Recession Analysis
The search for a silver bullet in business-cycle analysis is a hardy perennial. But it’s a search that’s almost certainly destined for failure.
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Mixed Messages In Treasury Market For Rate Outlook
Judging by futures prices, the market’s expecting that the Federal Reserve will raise interest rates again at next month’s monetary policy meeting. That’s also the implied outlook in the 2-year yield (considered to be the most-sensitive spot on the yield curve for rate expectations), which is close to a post-recession high. But the Treasury market’s softer inflation forecasts still leave room for debate about what comes next.
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Emerging-Markets Stocks Rise To 2-Year High
Equities in emerging markets advanced last week, posting the best performance among the major asset classes and touching a two-year high, based on a set of exchange-traded products.
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Book Bits | 13 May 2017
By Gary Saul Morson and Morton Schapiro
Summary via publisher (Princeton University Press)
Economists often act as if their methods explain all human behavior. But in Cents and Sensibility, an eminent literary critic and a leading economist make the case that the humanities, especially the study of literature, offer economists ways to make their models more realistic, their predictions more accurate, and their policies more effective and just. Gary Saul Morson and Morton Schapiro trace the connection between Adam Smith’s great classic, The Wealth of Nations, and his less celebrated book on The Theory of Moral Sentiments, and contend that a few decades later Jane Austen invented her groundbreaking method of novelistic narration in order to give life to the empathy that Smith believed essential to humanity.
