26th March 2019
Post Brent Woods, every time we had an inverted yield curve in the US, it was a preamble for a recession. However this did not happen right away. Please consider the following data points between when an inversion happened and when a recession came:
1st February 2019
Believe it or not, I was not surprised with the Fed’s interest rate pause, or the language used in the statement on Wednesday. In short, the Fed said: The labor market has continued to strengthen, Economic activity has been rising at a solid rate, Job gains have been strong, Unemployment rate has remained low.
28th January 2019
While the US economy is headed for a slowdown in 2019, by no way does this mean a recession. Both EPS growth and GDP growth will be lower in 2019, but it seems markets have run ahead of themselves, correcting far more than warranted. In a recent comment, ECB President Mario Draghi said that Europe is heading for a slowdown, but not a recession.
10th January 2019
As it is widely known the Fed wants to unwind its balance sheet. The current run rate is (was?) about $600 billion per year. While the Fed has not said to what levels it wants to reduce its balance sheet, in theory it could unwind the quantitative easing it conducted over the past decade in a few years.
13th November 2018
As noted in our company’s presentation in Athens several weeks ago, perhaps my biggest worry for the next 2 years is the appreciation of the dollar. Reason being, there are about $11.5 trillion of debt outside the jurisdiction of the Federal Reserve.