Research & News
Quarterly Energy Comment (July 18, 2017)
by Bill O’Grady The Market Oil prices peaked in March around $55 per barrel. There have been a series of lower highs and lower lows, as shown by the lines on the chart. This obvious downtrend has led to a general bearish tone to the market. We don’t necessarily share that level of pessimism; as… Read More »
Daily Comment (July 18, 2017)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Although global equity markets are steady to lower this morning, there is a lot of action in the forex markets. The dollar is sliding on a combination of lower expectations for Fed policy tightening and the lack of policy progress from the Trump administration. Here are… Read More »
Weekly Geopolitical Report – A Productivity Boom: A Response to Robert Gordon, Part I (July 17, 2017)
by Bill O’Grady Robert J. Gordon is a well-known economist and a professor at Northwestern University. A member of the National Bureau of Economic Research, his most notable work is in the area of productivity. His 2016 book[1] argued that the best years of American productivity are behind us—highlighted by the introduction of steam power to… Read More »
Daily Comment (July 17, 2017)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It was another quiet weekend. Here are the news items we are tracking this morning: China economy: GDP, somewhat predictably, came in a bit stronger than expected, at 6.9% (y/y%). It’s important to remember that China can generate any growth number it wants as long as… Read More »
Asset Allocation Weekly (July 14, 2017)
by Asset Allocation Committee One of the mysteries of this expansion has been the slow pace of wage growth. Despite the plethora of evidence that labor markets are tight, including hires-to-openings ratio below one, low unemployment, low initial claims and a low unemployment rate, wage growth has remained stunted. The chart below is one we have… Read More »
Daily Comment (July 14, 2017)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] The CPI data came in weaker than expected, sending the dollar and Treasury yields lower. We examine the data in the context of policy using our Mankiw model variations below. Outside the inflation numbers, here are some of the other news issues we are tracking this… Read More »
Daily Comment (July 13, 2017)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Here’s what we are watching today: Yellen, Round 2: There was nothing in Yellen’s testimony that differed from her opening statement which the markets took as dovish. Our comments yesterday appear to be mostly confirmed; the FOMC is shifting to emphasizing balance sheet reduction and less… Read More »
Daily Comment (July 12, 2017)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] The Chair speaks: The text of Chair Yellen’s comments has been released in front of her testimony to Congress. Market reaction is consistent with a dovish stance. Here is the excerpt that is probably triggering the weaker dollar/stronger equities/stronger Treasuries/higher gold trade: …based on our view… Read More »
Daily Comment (July 11, 2017)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s another quiet summertime morning. Here are the headlines we are watching: It’s official—Randal Quarles is likely the newest Fed governor: The Trump administration formally nominated Quarles for the chair vacated by Dan Tarullo. His name has been in the media for several weeks, so the… Read More »
Weekly Geopolitical Report – The Mid-Year Geopolitical Outlook (July 10, 2017)
by Bill O’Grady As is our custom, we update our geopolitical outlook for the remainder of the year as the first half comes to a close. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international landscape for the rest of the… Read More »