Federal Reserve To The Rescue?

The Fed’s Functions Since it was established in 1913 to be the Central Bank of the United States, the objectives of the Federal Reserve have changed.  Originally, the main job of the Fed was to enhance economic and price stability to lessen severe economic swings.  Since then, its mission has been amended over the years, […]

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Plunging Yields Point to Rising Deflation Risk

Long Term Interest Rates Plunge to 2.9% Despite the Federal Reserve’s (the Fed) policy of slowly raising rates to “Neutral”, the Bond Market won’t cooperate.  On Thursday, yields fell to a level that, not long ago, seemed UNTHINKABLE. The Mini-Slideshow below illustrates the dramatic downward moves in 5 year, 10 year and 30 year maturities.  […]

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Are We Heading Straight into Global Deflation?

Commodities, Led By Oil, Make New Lows Crude Oil is an input into producing virtually everything, including itself.  It takes oil to transport, refine, drill or pump oil.  Energy is a large portion of the cost of just about everything. West Texas Intermediate Crude Oil closed at $46.60 yesterday, a 40% drop since October.  The […]

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Stock Markets Bracing For Recession?

Bull Vs. Bear Debate Continues. As the major stock market indexes plunged during most of October, fear began to grip Wall Street.  On October 29th, the intraday trading range for the stodgy Dow Jones Industrial Average was nearly 1000 points.  The lows lasted a fraction of a second, however. Within the next 24 hours, the […]

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The Interest Rate Bomb: Is The Fuse Now Lit?

The Interest Rate Bomb: Is The Fuse Now Lit? Recently, we noted the critical role that higher inflation and interest rates would play in The Inflection Process.  Furthermore, the levels of interest rates seemed so low as to make very little logical sense (https://markonomics101.com/2018/09/03/inflection-point-part-5-interest-rates-inflation-and-inflection/.)  Not only does “reported” inflation (currently 2.9% annually) seem to vastly […]

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Interest Rates Poised To Turn Higher?

Interest Rates Poised To Turn Higher? Recently, we described the unusual relationship between inflation, GDP, and interest rates in “Inflection Point (Part 5): Interest Rates, Inflation, and Inflection” (https://markonomics101.com/2018/09/03/inflection-point-part-5-interest-rates-inflation-and-inflection/).  It is vital that investors understand the accuracy and quality of “official” numbers regarding economic performance, especially in making investment decisions. The Bureau of Labor Statistics […]

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