A Conversation About The October Payrolls Report
Overheard on the NISA trading floor, Friday, November 6, 2020. Jess Yawitz: “Another strong payrolls report this morning, eh?” Stephen Douglass: “Yep, the jobs...
November 19, 2020
Making Up Is Hard To Do: The Fed Adopts An Average Inflation Target Part II
In a post earlier this week, we explained how the Fed’s new flexible average inflation targeting (AIT) framework is motivated by a desire to...
October 29, 2020
Making Up Is Hard To Do: The Fed Adopts An Average Inflation Target
In a landmark speech at the Jackson Hole conference in late August, Chairman Powell announced the first significant revision to the Fed’s operating framework...
October 27, 2020
Initial Jobless Claims Only Tell Half The Story, And It’s Not The Good Half
Regular readers will know we’ve been on somewhat of a campaign against economic disinformation this year, describing how data errors and faulty seasonal adjustments...
October 20, 2020
Progress
As we have been saying, the seasonal adjustment process for initial jobless claims has been wholly inappropriate given the scale of job losses during...
August 28, 2020
Seasonally Maladjusted: How Statistical Methods Have Destroyed 3.7 Million Jobs Since March
In this short note we demonstrate, primarily using a few examples and data points, how totally inappropriate it is to seasonally adjust initial unemployment...
July 30, 2020
Labor Market Update: Objects in Mirror are Better than They Appear
The labor market continued its spectacular recovery in June. The jobs report released on Friday reflected a net gain of 4.8 million jobs, almost...
July 9, 2020
A 10 Million Job Surprise
The May jobs report produced the biggest surprise we have ever seen from an economic data release. Nonfarm payroll employment increased by 2.5 million...
June 15, 2020
A Recession Unlike Any Other
The longest expansion in U.S. economic history ended in February. March ushered in a recession that will be unlike any other we have seen...
April 24, 2020
Coronavirus Fear Shocks Global Markets
Coronavirus has sent shockwaves throughout global financial markets. Since mid-February major global equity indices are down by 10-20%, investment grade US dollar credit spreads...
March 6, 2020
State of the US Consumer in Four Charts
With no shortage of economic uncertainty in the world, it is natural to ask whether the US consumer can continue as the primary engine...
November 18, 2019
Monetary Policy in the U.S. is Being Determined by European (Japanese) Financial Markets
As we approach the next Fed meeting in September, expect more chatter on 1) whether they should ease and 2) what the inverted Treasury...
September 4, 2019
Go Long!
The Treasury Department is considering issuing an ultra-long bond with a maturity greater than 30 years. The idea was first raised in post-election interviews...
May 19, 2017
Make Funded Status Great Again (Again)
The ongoing equity rally and the rise in Treasury yields prompted us to revisit this analysis. Between yesterday’s close (December 1) and November 10,...
December 2, 2016
Make Funded Status Great Again
It has been an interesting week. Regardless of your political leanings, Tuesday’s election seems to have already produced another unlikely winner: defined benefit plan...
November 11, 2016
There’s Beta in My Alpha! (Part 2)
I received some feedback asking whether the high correlation of managers both to beta and to each other applies to “Aggregate” managers as well....
June 8, 2016
There’s Beta in My Alpha!
When I was a kid, being called different never felt like a good thing. Fortunately, with age I have come to realize that sometimes...
May 20, 2016
Brazil Downgraded to Junk—But It’s Not High Yield!
Brazil’s sovereign debt was recently downgraded below investment grade (IG). Before the downgrade, its index-eligible bonds were included in both the Barclays US Credit...
December 22, 2015
Fed Liftoff: More Questions than Answers
Markets are currently implying nearly an 80% probability that on December 16th the fed funds target range will be raised by 25 basis points....
December 10, 2015