The Tematica take on Fed hikes, balance sheet contraction and other works of creative fiction

The Tematica take on Fed hikes, balance sheet contraction and other works of creative fiction

The market reaction to the FOMC statement is that it was more hawkish than what had already been priced in. While the market was priced at a 50/50 chance for a rate hike before the end of the year, the now infamous dot-plot shows that 12 of the 16 members expect one more hike this year, with one expecting two.

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Inflation waning while bonds dispute moves in stocks

Inflation waning while bonds dispute moves in stocks

Wednesday the Federal Reserve, as expected, raised rates, but even more importantly they release an outline of their plans to shrink the Fed’s balance sheet, which you can read here. We must also note that raising rates in a period of falling bond yields and where the 3-month change in core CPI is collapsing is […]

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Economic Data Continues to Paint Peaking Picture

Economic Data Continues to Paint Peaking Picture

This view never gets old.While this was a shortened week with the Memorial Day holiday, it was certainly packed with economic data. Yours truly fell a bit behind coupled with the short week and another one of my trips from Southern California back to my other home base in Italy, so this is a longer […]

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Data or Divination?

Data or Divination?

You’ve probably already learned that on Wednesday the Federal Reserve Open Market Committee increased its Fed Funds rate to 0.75 – 1.0 percent. The markets were concerned that we would hear a much more hawkish tone from the Fed, which would have implied a possibly faster pace of rate hikes. Chair Janet Yellen’s prepared speech coupled […]

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Trump on accelerator while Fed tapping the breaks

Trump on accelerator while Fed tapping the breaks

While the headlines have been dominated by talk of whether or not President Trump can get Congress to work with him and to just what extent the Republicans will unite behind him, the bigger but much less obvious battle is between the White House and the Fed. While the Trump administration is talking all about […]

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Fed’s Yellen boosts expectations of March rate rise

Fed’s Yellen boosts expectations of March rate rise

As the Federal Reserve’s GDPNow revises estimates for the first quarter 2017 GDP growth down to a decidedly unimpressive 1.8 percent, today Fed Chair Janet Yellen gave an audience in Chicago a quasi-definitive on a March hike.   Following a week of hawkish messages from top US rate setters, the Fed chair told an audience in […]

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Revisiting Position Ratings as the Stock Market Grinds Higher

Revisiting Position Ratings as the Stock Market Grinds Higher

Since our last issue, the stock market continued to move higher on the news that President Trump will soon be sharing his tax overhaul plan and Fed Chairwoman’s Yellen’s congressional testimony yesterday.

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America First? When it comes to GDP we get the bronze!

America First? When it comes to GDP we get the bronze!

Yesterday we talked about how the American economy, despite all the euphoric headlines since the election, didn’t deliver much of a performance in the fourth quarter and in fact we saw the weakest full-year GDP growth rate since 2011 which was well below the U.K.’s 2016 growth rate of 2 percent. Today we learned that the Eurozone […]

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Double-Digit Premium Hikes Do Not Make for an Affordable Care Act

Double-Digit Premium Hikes Do Not Make for an Affordable Care Act

With official confirmation from the Obama Whitehouse that consumer are going to face double-digit premium hikes for healthcare, it means less disposable income for the consumer-led US economy. We have to wonder if Janet Yellen and the rest of the Fed’s FOMC has factored this into their forecast and interest rate hike decisions… Premiums will go […]

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