Waiting For Inflation?

Over the last several years we have seen a significant increase in the Federal debt and the recently concluded budget deal suggests that both political parties are now on board for continuing deficit spending.  Moreover, this antipathy to fiscal austerity is currently in vogue around the globe. Conventional wisdom would hold that continuing deficit spending … Continued

The Fed and the Phillips Curve

According to Wikipedia, the Phillips curve is a historical inverse relationship between rates of unemployment and corresponding rates of inflation.  Theoretically, reductions in the unemployment rate should cause prospective employers to offer higher wages which, under some circumstances, can have an inflationary effect. Clearly, the Fed looks at a wide range of metrics in determining … Continued

The New Normal?

Over the last several months we have seen substantial short term volatility in the major market averages, but on a year-to-date basis, very little net change.  Commodity prices have been under pressure, interest rates have remained at historically low levels and unemployment data, while appearing to be positive, has not resulted in any significant increase … Continued

Fed Watching – The Employment Debate

Speculation regarding the Fed’s next meeting and the possibility of higher interest rates remains at the forefront of financial news reporting. As a reminder, the Fed’s three key objectives are: maximum employment, stable prices and moderate long-term interest rates.  The first two objectives are often referred to as the Fed’s dual mandate. Currently, there is … Continued

The Fed’s Interest Rate Decision

In his blog on Fed watching, my colleague Walter does an excellent job of explaining and summarizing the Fed’s reasons for not raising interest rates last week.  Many market participants seem frustrated by the lack of action by the Fed.  Admittedly, as the Fed continues down the road less traveled, the lack of an interest … Continued

Government Economic Data?

Any attempt by investors to strategize based on government data should consider that virtually all announced monthly statistics are subject to almost endless revisions, some of which may be substantial.  It is also clear that the media will precede actual announcements with a seemingly endless and widely diverse array of projections, followed by a minute … Continued

The Minimum Wage Dilemma

The issue of raising the minimum wage has always been controversial and with the run up to the November 2016 elections, the rhetoric has become more pervasive and heated.  This is an important issue for investors and, to a lesser extent, consumers. It seems that the pros and cons of the matter can be summarized as … Continued

Fed Watching

It appears that, after reviewing the latest comments from the Fed, the majority of prognosticators continue to believe that the Fed is likely to modestly increase interest rates at the September meeting.  Apparently these expectations come despite some real questions as to whether economic conditions actually warrant higher interest rates.  Consider: Inflation appears to be running … Continued

“The Business of America is Business”

The title of this blog is a quote from a January 17, 1924 speech by then President, Calvin Coolidge.  According to Wikipedia, the ultimate assessment of his presidency is still divided between those who approved of his reduction in the size of government programs and those who believe the federal government should be more involved … Continued

Corporate Short-Termism

Short-termism refers to an excessive focus on short-term results at the expense of the long term. Numerous politicians, on both sides of the aisle, and most recently Hillary Clinton, have sought to blame the weak economic recovery over the last several years, on the perception that corporate America is consumed with an effort to maximize … Continued

The Jobs Dilemma

Monthly unemployment data suggests that the nation is enjoying a solid economy with a positive outlook.  On the other hand, work force participation remains at historically low levels of approximately 63% and the latest job openings data stands at the highest level since this metric began in 2000.  What is going on and why should … Continued