Article Category: Interest Rates

The last five economic recessions were all preceded by a spike in crude oil prices. Does that mean we should worry about yesterday’s historic jump in the price of oil? In a word, no.

It’s September, and guess what that means? New Tariffs! Woohoo!

What, you’re not excited about more tariffs? You don’t want to pay more for goods and see a further dampening effect on economic growth? You actually want the economy to keep growing? Well, too bad for you.

Interest rates have been the primary focus of investors lately, and for good reason. A glance at the chart of the 10-year Treasury note yield below shows that while rates have been steadily declining for nearly a year, that move accelerated sharply during the last two weeks.

Mr. Powell and the Fed continue to claim that their actions are data-dependent, but the question is beginning to arise: What data are they dependent on? The fact that many Fed officials have referred to this as an “insurance cut,” almost by definition suggests that fundamental economic data doesn’t justify a move lower.

Jerome Powell’s testimony last week offered no pushback against rate-cut expectations, and if anything, actually stoked the fire. Bets of a 50 basis point cut, as opposed to 25, rose, indicating the market shifted to an even more dovish stance.