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Michael Strain: The Fed Should Not Cut Interest Rates Yet
Posted: July 17, 2024 at 08:15 AM (Wednesday)

WASHINGTON, DC – Investors are betting on interest-rate cuts by the US Federal Reserve in September, and potentially even in late July. But the outlook for inflation and the labor market in the United States does not indicate that policymakers should begin lowering rates in the next two months. With inflation cooling and unemployment rising ...


John Tamny: The 'Sahm Rule’ Is Thoroughly Nonsensical, Like Macroeconomics Itself
Posted: July 16, 2024 at 04:00 PM (Tuesday)

"What is harmful or disastrous to an individual must be equally harmful to the collection of individuals that make up a nation." – Henry Hazlitt Oh, the obnoxious, naïve conceit of economists. They literally think they can measure the infinite actions taking place every millisecond in order to make their country, and not infrequently, ...


Mark Mills: A Bet Against the “Energy Transition”
Posted: July 16, 2024 at 02:56 PM (Tuesday)

Modern civilization depends on abundant, affordable, and reliable energy. Policies that ignore this won’t turn out well. Starting this month, everyday citizens, not just hedge fund managers and traders, will be able to make direct bets on "big" issues ranging from basic economic indicators to the weather. Based in Greenwich, Connecticut, ...


Adam Millsap: Nostalgia For Manufacturing Jobs Is Misplaced
Posted: July 16, 2024 at 08:49 AM (Tuesday)

President Joe Biden and former President Donald Trump are competing to convince voters that they alone can protect manufacturing jobs, promising to use tariffs, "Buy American" rules, and subsidies to get the job done. Their supporters praise their efforts, convinced that the manufacturing jobs once common in the 1950s and 60s are vital to ...


Conor Sen: The Housing Market Will Tell the Fed How Much to Cut Rates
Posted: July 16, 2024 at 06:00 AM (Tuesday)

A lot of pent-up economic energy will be unleashed once mortgage rates fall to levels that boost transactions and home-linked consumption. It’s been clear since the fall of 2022 that the housing market needed lower interest rates to fix many of its problems including a lack of affordability for buyers, the mortgage rate lock-in dynamic ...


Thomas Sowell: Lessons of the Trump Assassination Attempt
Posted: July 15, 2024 at 05:53 PM (Monday)

The world sees a strong American leader even amid ominous division. Although the attempt to assassinate Donald Trump failed, it was part of a long and growing pattern of threats and violence that can be fatal to American society. This need not be a plot. It may simply reflect a set of dangerous attitudes and actions that have been building ...


Kathleen Hays: Wall Street "Voting Its Pocketbook" as Stocks Rally on Trump Win Bets: Farr
Posted: July 15, 2024 at 05:42 PM (Monday)

Farr Miller & Washington CEO: Ending Fed Independence "Dumbest Idea I Ever Heard'. Welcome to Central Bank Central. I'm Kathleen Hays. Well, as we all know, the assassination attempt on former President Donald Trump sent shockwaves across the country, around the world, and certainly started moving markets immediately over the weekend. Today, ...


Christopher Rufo: A Compromised Secret Service
Posted: July 15, 2024 at 11:19 AM (Monday)

The agency has sacrificed its basic mission on the altar of DEI. It was a shot heard around the world. On Saturday, a gunman whom the FBI has identified as Thomas Matthew Crooks fired a burst of rifle shots at former president Donald Trump, grazing his ear and nearly killing him. The attempted assassination is an historic, and perilous, ...


John Tamny: As Policy Types Cheer the Demise of 'Inflation,’ Inflation Arrives
Posted: July 14, 2024 at 10:00 AM (Sunday)

The New York Times reports that the Sixth Street Bridge in Los Angeles "goes dark at night now. So do stretches of the busy 405 freeway and dozens of street blocks across the city." Times reporter Michael Corkery adds that "In St. Paul, Minn, a man was recently hit by a car and killed while crossing a street near his home where streetlights ...


Komal Sri-Kumar: Interest Rates: No Rest For the Weary!
Posted: July 13, 2024 at 10:02 AM (Saturday)

Latest Inflation Data Good But Not Sufficient. US Treasury holders received welcome news from consumer price index data released by the Bureau of Labor Statistics on Thursday. Headline CPI declined by 0.1% in June after being flat in May. The increase over the past 12 months slowed to 3% from 3.3%. Federal Reserve's annual inflation target of ...


Brian Riedl: Why Did Americans Stop Caring About the National Debt?
Posted: July 13, 2024 at 06:00 AM (Saturday)

Both parties—and the voters—are to blame for the national debt fiasco. Scroll down to see how big the national debt may get over the next few decades, and then read about how we got here. When President Joe Biden delivered his 2023 State of the Union address, Washington was drowning in a sea of red ink. The annual budget deficit was in ...


Jed Graham: Federal Reserve Rate Cuts: Here's How Fast They'll Happen
Posted: July 12, 2024 at 04:20 PM (Friday)

A Federal Reserve rate cut in September and another in December looks like a nearly sure thing after this week's consumer price index and producer price index data. The S&P 500 got climbed in Friday afternoon stock market action after PPI inflation overshot estimates but looked benign below the surface. PPI Inflation Producer prices for ...


Alexander William Salter: Consumer Prices Decline in June
Posted: July 12, 2024 at 03:15 PM (Friday)

The Federal Reserve is trying to engineer a gradual disinflation. It is getting outright deflation. The Bureau of Labor Statistics reported that the Consumer Price Index (CPI) decreased 0.1 percent in June. Consumer prices have grown 3.0 percent over the last year, which is the lowest 12-month rate since March 2021. Core CPI, which ...


Liz Peek: Biden cheers inflation drop, but oil price rise looms
Posted: July 12, 2024 at 08:00 AM (Friday)

President Biden is cheering the latest CPI report showing that prices overall declined slightly in June from the prior month. In a statement, the president boasted, “Today’s report shows that we are making significant progress fighting inflation.” It was good news for the beleaguered White House, and for Democrats wanting to ...


Steven Greenhut: California Gov. Newsom Crushed Ballot Initiative That Could Have Limited Tax Increases
Posted: July 12, 2024 at 07:30 AM (Friday)

What happened to caring about the will of the people? Both major American political camps are convinced that democracy is under attack by the other side, and they probably are both largely correct. There simply are different styles and approaches for thwarting the supposed will of the people–or at least for undermining the complex system ...


Raghuram Rajan: Bracing for a More Inflationary World
Posted: July 11, 2024 at 07:49 AM (Thursday)

CHICAGO – Faced with societal aging, de-globalization, climate change, anti-immigration sentiment, and technological advances, central banks will feel pressure from many directions in the coming years, even after they bring today's inflation under control. Difficult trade-offs will be unavoidable. In many countries, the political landscape ...


Allison Schrager: Inflation Lessons Unlearned
Posted: July 9, 2024 at 02:54 PM (Tuesday)

A new White House proposal won’t help lower Americans’ grocery bills. When I was a graduate student in economics and learned about the inflation of the 1970s, I marveled at how poorly policymakers understood the problem. The price controls they enacted that decade failed miserably, leading to shortages and other market disruptions. I assumed, as ...


Ed Yarden: Market Call: The Bull Market's Alleged Vulnerabilities
Posted: July 7, 2024 at 10:20 PM (Sunday)

The stock market's bull run since October 12, 2022 has raised some concerns lately. According to the naysayers, earnings growth expectations may be too high because there are mounting signs of an economic slowdown that might lead to an economic recession. The breadth of the stock market rally continues to narrow, which may be confirming that ...


Komal Sri-Kumar: Too Early to Cut Rate in September - Jobs, Inflation Data Still Urge Caution
Posted: July 6, 2024 at 09:11 AM (Saturday)

The nonfarm payrolls report released yesterday by the US Bureau of Labor Statistics was supportive of the belief that the economy continues to be on a growth path. 206,000 jobs created in June were less than in prior months but still exceeded the 190,000 figure that the consensus had anticipated. Positive job creation has been the hallmark of ...


Peter Earle: June U-3 Jobless Rate Triggers Sahm Rule: Recession Ahead?
Posted: July 5, 2024 at 09:18 AM (Friday)

In this morning's US Bureau of Labor Statistics data release, the U-3 unemployment rate increased 4.1 percent in June 2024, rising by one-tenth of a percentage point above the forecast rate. The U-3 rate measures the percentage of the civilian labor force that is jobless, actively seeking work, and available to work, excluding discouraged ...


Conor Sen: McDonald’s $5 Meal Tells You Where Prices Are Headed
Posted: July 5, 2024 at 07:00 AM (Friday)

Whether you’re selling hamburgers or dry goods on a shelf at Walmart, the days of inflation boosting earnings are over for consumer companies. Between McDonald’s $5 value meal, Taco Bell’s $7 cravings box and budget breakfasts from Starbucks and Wendy’s Co., fast food chains are fighting hard to win over hungry Americans this summer. Why now? ...


Jason Furman: Immigration Is Behind the Strong U.S. Economy
Posted: June 30, 2024 at 03:04 PM (Sunday)

We’d be a poorer, weaker country without it. Too bad Biden couldn’t make that point at the debate. The most economically important part of the presidential debate was a leitmotif—and at times, a heavy motif—throughout the evening: immigration. While Donald Trump made many false remarks throughout the debate, he spoke a grain of truth when he ...


John Tamny: Monetarism Didn’t Discredit the Phillips Curve, Rather It Mirrors It
Posted: June 30, 2024 at 10:00 AM (Sunday)

Government has no resources. It can only spend what it's taken from us first. Yet Keynesian economists (meaning the vast majority of economists) believe government spending boosts economic growth. Economists point to the consumption that government enables, and voila, growth! Except for one problem. To enable consumption through ...


Nick Timiraos: Even a Slowly Cooling Labor Market Often Ends With a Recession
Posted: June 30, 2024 at 12:01 AM (Sunday)

The job market rarely rebalances painlessly; the Fed hopes this time is different. The pandemic left the U.S. labor market badly overheated. Reopening businesses panicked at labor shortages, paying big raises to hire. As prices shot higher, fears rose of a wage-price spiral.Recently, though, the labor market has cooled, and indeed, looks ...


Komal Sri-Kumar: PCE: Not Sufficient to Cut Rates - Why Fed Has to Wait
Posted: June 29, 2024 at 09:44 AM (Saturday)

There were few surprises in yesterday's release of the May data on Personal Consumption Expenditure price index by the US Bureau of Economic Analysis. Publication of the Consumer Price and Producer Price Indexes earlier in June had already suggested that the PCE numbers would be benign because of the components of the CPI and PPI that feed ...


Jed Graham: Key Federal Reserve Inflation Rate Cools, Lifting Rate-Cut Hopes
Posted: June 28, 2024 at 04:30 PM (Friday)

The primary Federal Reserve inflation gauge rose at the slowest pace since late 2020 in May, while consumer spending remained sluggish, raising hopes for a September rate cut. The S&P 500 hit a new record on the Fed-friendly data after rallying overnight on an election-shifting presidential debate, but a late-morning rise in Treasury yields ...


Ilya Shapiro: Long Live Judicial Review
Posted: June 28, 2024 at 02:19 PM (Friday)

Overturning Chevron is the story of this Supreme Court term. Whoever thought that an obscure case about fishing regulations would bring down a core part of modern administrative law, the rules that govern the executive-branch agencies that write the rules by which we live our lives? In Loper Bright Enterprises v. Raimondo, the Supreme Court ...


William Luther: Prices Decline in May, Monetary Policy Tightens
Posted: June 28, 2024 at 02:02 PM (Friday)

The United States experienced a mild deflation in May, according to new data from the Bureau of Economic Analysis (BEA). The Personal Consumption Expenditures Price Index (PCEPI), which is the Federal Reserve's preferred measure of inflation, grew at a continuously compounding annual rate of -0.1 percent in May 2024, down from 3.2 percent in ...


Adam Millsap: Congress Should Look To States For Tax Reform Ideas
Posted: June 28, 2024 at 09:05 AM (Friday)

Major pieces of the 2017 Tax Cuts and Jobs Act (TCJA) expire at the end of 2025, at which time taxes will increase by over $400 billion annually. While the TCJA improved the federal tax code, Congress and whoever the next president is should look to the states for ideas to make it even better. A good tax code raises the revenue needed to ...


Bill Dudley: The Real Reason to Worry About the Huge US Budget Deficit
Posted: June 28, 2024 at 06:00 AM (Friday)

Don’t fret about the immediate effect on money markets. Do fear that the bond vigilantes will reawaken. The US government’s finances keep looking worse. The latest Congressional Budget Office projections suggest that it will need to borrow an added $400 billion this year to cover its budget deficit — and trillions more over the next ...


Larry Fink: Infrastructure plus pragmatism is the recipe for G7 growth
Posted: June 28, 2024 at 12:00 AM (Friday)

Few disagree on the goal but turning it into reality requires strategic thinking. When the G7 met in Puglia recently, the seven countries around the table accounted for 61 per cent of the planet’s public debt, 45 per cent of its GDP and 11 per cent of its workforce. The economic future of the world’s major democracies depends on decreasing ...


Kathleen Hays: Sri-Kumar: "Hard Landing" Will Bring U.S. Inflation Down
Posted: June 27, 2024 at 04:59 PM (Thursday)

Global Macroeconomist Says Commercial Real Estate Is "Time Bomb Waiting to Explode". Welcome to Central Bank Central. I'm Kathleen Hays. We've already heard from a chorus of Fed speakers again this week. What have they told us about where policy is heading? What does it mean for the markets, particularly the bond market, short-term ...


Norbert Michel: Banks, Not Regulators, Should Be In The Business Of Innovating
Posted: June 27, 2024 at 08:00 AM (Thursday)

The U.S. financial regulatory framework has become increasingly wasteful and unproductive, and not simply because Congress passed the 2010 Dodd-Frank Act. There was a clear long-term trend long before the 2008 financial crisis, the calamity that inspired Dodd-Frank. Three otherwise unrelated events from the previous month demonstrate that ...


David Malpass: For Trump as for Clinton, It’s Still the Economy, Stupid
Posted: June 26, 2024 at 01:41 PM (Wednesday)

Biden’s costly rules and spending made inflation worse. The challenger would foster growth. Inflation is the defining problem of Thursday’s presidential debate and the U.S. economy. It is preventing interest-rate cuts and slowing the economic growth rate, which sank to 1.3% in the first quarter. Inflation chews up anyone with limited ...


Mohamed El-Erian: The Growth Agenda for the United Kingdom
Posted: June 26, 2024 at 11:30 AM (Wednesday)

CAMBRIDGE – After years of insufficient investment and sagging productivity in the UK, the Labour Party recognizes that achieving high-quality growth will require a comprehensive policy approach that builds on many intermediate objectives. But devising a strategy is only the first step; the real challenge lies in implementation. As in many ...


Preston Cooper: Student Loan Cancellation Faces Yet Another Legal Defeat
Posted: June 26, 2024 at 08:56 AM (Wednesday)

Two federal judges issued orders blocking the Biden administration from implementing key provisions of its Saving on a Valuable Education (SAVE) plan, a new federal student loan repayment plan that would have slashed borrowers' payments–at considerable cost to taxpayers. Though the orders are preliminary and could be reversed or altered by ...


Brian Riedl: More Inflation, Less Growth, and Higher Deficits
Posted: June 26, 2024 at 08:00 AM (Wednesday)

Assessing the two major presidential nominees' economic agendas. President Joe Biden and former President Donald Trump head into this week's first presidential debate with polls showing a virtual dead heat. The election is likely to turn on economic issues, with voters expressing serious concerns over persistent inflation, rising interest ...


Conor Sen: Homebuilders Urgently Need Fed Rate Cuts
Posted: June 24, 2024 at 06:30 AM (Monday)

Slumping new home construction and weak sentiment among developers bodes poorly for housing supply in the US. New home construction slumped to the weakest level in four years in May, confirming a trend that’s been evolving for the past few months — residential construction is once again acting as a drag on economic growth in the US. This ...


Alexander William Salter: There’s No Good Reason to Raise the Inflation Target
Posted: June 24, 2024 at 06:00 AM (Monday)

The Federal Reserve has a 2-percent inflation target. Central bankers are supposed to conduct monetary policy such that the long-run trajectory of the price level follows a 2-percent growth path. Most policy-focused macroeconomists think this is a reasonable way to achieve price stability and predictability without running the risk of ...


Arthur Laffer and Stephen Moore: Bidenomics, Also Known as MMT
Posted: June 23, 2024 at 02:59 PM (Sunday)

The crazy economic theory that spending has no consequences. Sometimes ideas that seem obviously silly catch on and cause serious destruction. In the late 2000s Australian economist Bill Mitchell coined the term “Modern Monetary Theory,” or MMT, to describe what one might call Keynesianism on steroids. John Maynard Keynes (1883-1946) argued ...


Ed Yardeni: Market Call: Bad Breadth Again
Posted: June 23, 2024 at 01:35 PM (Sunday)

The stock market has a bad breadth problem again. For a while, it seemed to be attributable to the outperformance of the Magnificent-7. Many other stocks performed well, but not as well as the Mag-7. More recently, the outperformance seems to be narrowing to the Magnificent One, i.e., Nvidia (chart). Technical analysts are warning that ...


Komal Sri-Kumar: Fed: Not Promising A Rose Garden, Officials Turn Hesitant on Rate Cuts
Posted: June 22, 2024 at 10:34 AM (Saturday)

The median forecast by Federal Open Market Committee members after their most recent meeting on June 11 - 12 was just one rate cut during the rest of 2024. This compares with the median expectation of three cuts at the March meeting. Despite the disappointment for investors hoping for rapid Fed easing, yields have fallen across the curve ...


Steven Greenhut: Boom in DIY Medical Testing Gives Americans More Control Over Their Health
Posted: June 21, 2024 at 07:45 AM (Friday)

Thanks to clever inventions and investments from venture capitalists, the average American can head to CVS and purchase kits to test for drug use, sexually transmitted diseases, AIDs, diabetes, blood pressure and cholesterol. One of my favorite memes on X this week showed two photographs–one of war and devastation and the other of a ...


Alexander William Salter: Trump’s Tariff Trap
Posted: June 20, 2024 at 04:41 PM (Thursday)

Replacing income taxes with tariffs doesn’t pencil out. Donald Trump rocked Washington last week with his proposal to fund the federal government solely from tariffs. Until roughly a century ago, tariffs composed the vast majority of national revenue, but today income and business taxes make up the lion's share. Can Uncle Sam go back? ...


Daron Acemoglu: If Democracy Isn’t Pro-Worker, It Will Die
Posted: June 20, 2024 at 11:38 AM (Thursday)

BOSTON – Democracy is in crisis throughout the industrialized world because its performance has fallen short of what was promised. Far-right and extremist parties are benefiting from the fact that the center left and center right are now associated with wage stagnation, rising inequality, and other unfavorable trends. Even if the feared ...


Ken Roberts: China Trade With U.S. Evaporating, Below 10% For Last Two Months
Posted: June 20, 2024 at 05:00 AM (Thursday)

For only the second time in 20 years, China trade have fallen below 10% of total U.S. trade for two consecutive months, according to my analysis of the latest U.S. Census Bureau data. If China should finish the year in single digits – it did so for the months of March and April, the latest data available – it would mark the first time it will ...


Veronique de Rugy: The Supreme Court May Be on the Brink of Radically Restricting Bureaucrats' Power
Posted: June 20, 2024 at 02:34 AM (Thursday)

Chevron deference, a doctrine created by the Court in 1984, gives federal agencies wide latitude in interpreting the meaning of various laws. But the justices may overturn that. The United States Constitution vests all legislative powers in Congress. Yet, over the past century, we've witnessed a disturbing trend of legislators ...


Brian Riedl: Debt will hit a shocking $50 trillion by 2034, as DC continues to spend, spend, spend
Posted: June 19, 2024 at 06:33 PM (Wednesday)

While Congress and the presidential campaigns continue with business as usual — pledging more government giveaways and deep tax cuts — the government’s own accountants have once again revealed that the era of free lunch economics is over. The Congressional Budget Office (CBO) released new budget estimates showing that this year’s budget ...


Brian Blase: The $20 Billion ObamaCare Subsidy FraudIt’s a boon for agents, brokers and insurance companies—and the Biden administration enabled it.
Posted: June 19, 2024 at 05:41 PM (Wednesday)

The Biden administration has made ObamaCare even more wasteful than it already was. A new Paragon analysis estimates that five million enrollees are receiving health-insurance subsidies well above the amounts to which they are legally entitled. The subsidy amount is largely determined by income, so that brokers and insurers alike ...


Paul Vallas: Minority Success Is Possible
Posted: June 19, 2024 at 12:48 PM (Wednesday)

Data on legal immigrants’ economic performance make clear that blacks can succeed in America. The idea that minorities can't succeed in the United States today not only encourages defeatism but is also untrue. Data on legal immigrants from Latin America and Africa reveal that many outperform native-born Americans from their demographic group, ...