5 Things to Know in Investing This Week – The Intel “Incinerated” Nothing Issue
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July CPI is 3.4%
CPI of 3.4% was in line with expectations and a small decrease vs last month’s 3.5%. The monthly change was 0.1% and as usual, was driven by shelter which accounted for two-thirds of the rise. Core CPI of 2.5% was also in line with estimates and slightly below last month’s 2.6%. The monthly change of … Read more
5 Things to Know in Investing This Week – The It Doesn’t Matter What Warsh Said Issue
I’m still in Antigua, Guatemala where the weather is beautiful and I was woken up at 1am by the second earthquake in two weeks here. If one of you has upset a volcano, please apologize. The Federal Reserve kept the fed funds rate unchanged. Many expressed concern regarding the three dissenters who wanted a 25bp … Read more
The Fed Holds with Healthy Dissents
The Federal Reserve concluded its July meeting and elected to keep the fed funds rate unchanged. Wall Street had a meaningful probability on a small rate hike (around 33%). While I understood the logic, and would have voted to hike had I been in the room, I was on record saying I thought they’d hold. … Read more
June CPI is 3.5%
As a reminder, I’m using the new shorter format here. I think the previous 9-10 page commentary was helpful when I started writing it every month, but is no longer serving us well. The CPI report does matter, but it’s not driving markets like it did in ’22, ’23, and ’24. In addition, the economy … Read more
5 Things to Know in Investing This Week – The Everyone is Buying Something Issue
The Fed completed its first Warsh-led meeting and promptly spooked the market with a hawkish dot plot. I think that doesn’t matter as inflation is being driven by Congress. Warsh is declining to provide guidance which I view as a positive. All the chatter wasn’t getting us better results and the Fed tends to be … Read more
The First Warsh Fed Meeting
The Federal Reserve completed its June meeting and the first one with Kevin Warsh as Chairman. The details: – The Fed kept the fed funds rate unchanged. This was the overwhelming consensus expectation. – On the dot plot, nine of 19 Fed officials expect an increase in the fed funds rate later this year. (Warsh … Read more
5 Things to Know in Investing This Week – The Why is Bitcoin Down Issue
The CPI rose again and cracked 4%. Energy is still expensive, but you already knew that. The big issue is Powell never got inflation under control. People panicked that Warsh would cut. He can’t and at this point, there’s nothing the Fed can do (something I’ve been saying for the past two years). Bitcoin has … Read more
5 Things to Know in Investing This Week – The Warsh is Trapped Issue
Kevin Warsh takes the big chair with no room to cut. The stock market yawns and I point out for the nth time that Fed rate cuts don’t lead to lower borrowing rates. The yield on the Japanese Government 30 year is up by even more leading to a reduced incentive for the carry trade. … Read more
5 Things to Know in Investing This Week – The Warsh Fed Issue
Kevin Warsh gets the big chair and the most glamorous job in finance. After months of reporters panicking about the loss of Fed independence (something that never existed), Warsh takes over with no room to cut rates. I said in the summer of ’24 that Powell shouldn’t cut. I stand by that assertion. eBay rejected … Read more
