The Fed sees years of slowing growth. Prepare for years of political turmoil.

Summary: Slowing economic growth and rising inequality are the unmentioned elephants in Campaign 2016. While inequality gets the headlines, slowing growth is more important. The Fed forecasts show that they see it. Do we? Are we preparing for the resulting political or social turmoil, or trying to restart the engines of growth? Time is not … Continue reading The Fed sees years of slowing growth. Prepare for years of political turmoil.

The Government Has A Clip Full Of Ammo To Fight The Next Recession

Summary: It's time to prepare for a possible recession in 2016. The manufacturing slump continues to deepen. A toxic combo: high inventories in November and weak retail sales in December. In February this expansion will tie for the 3rd longest expansion. {2nd of 2 posts today.} The Atlanta Fed's GDPnow model just lowered its est … Continue reading The Government Has A Clip Full Of Ammo To Fight The Next Recession

Why did the Fed raise rates? For the opposite of the reason they gave…

Summary: The Fed Governors told us they planned to raise rates, and months ago told us when they would do so. But their explanation of why they raised rates makes little sense. We can see their thinking by looking at the economic projections released at the Open Market Committee meetings. They raised rates not because … Continue reading Why did the Fed raise rates? For the opposite of the reason they gave…

Why is the Fed Talking up the Economy? The Answer Reveals Much.

Summary: What will the Fed do during the next few months? They try to clearly communicate their plans, so we need only listen. Unfortunately we have to read between the lines to see their thinking. Such as we see with this speech by Dennis Lockhart (President of the Atlanta Fed): “Assessing Economic Conditions for Liftoff“, … Continue reading Why is the Fed Talking up the Economy? The Answer Reveals Much.

The Fed sees a darkening future – and the key fact about our economy

Summary: Today's economic forecast by the Fed gives us another dose of bad news, wrongly overshadowed by their decision not to raise interest rates (resulting from it). Ignore economists' guessing about the next tick up or down in the economy. The key insight is that America can't grow fast but cannot afford to slow.  {2nd … Continue reading The Fed sees a darkening future – and the key fact about our economy