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
Perspectives Contributor:
Stephen J. Douglass
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
Service Required: The Unique Structural Impact of the 2020 Recession
The pandemic caused a recession unlike any other in American history. We’ve previously discussed the unprecedented speed of the shock itself and the policy...
October 8, 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
The Fed’s Crisis Playbook: Speak Softly and Carry an Unlimited Balance Sheet
COVID-19 has delivered an economic shock of unprecedented speed and severity. The Federal Reserve under Chairman Powell has responded with the most aggressive policy...
May 20, 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
Treasury Yields: How Low Can They Go?
This has been a frequent question from clients in the past week as the spike in cross-asset volatility sent Treasury yields plunging to record...
March 12, 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
FAQ: What Happened in the Repo Market Last Month?
A volatile September in the normally placid money markets inspired a number of client inquiries, and a few overzealous headline writers in the financial...
October 9, 2019
Global Bond Yields Plunge to Record Lows
Bond yields have fallen dramatically around the world this month, driven by the latest escalation of the trade war as well as signals that...
August 21, 2019
The Waiting is the Hardest Part: An Update on the LIBOR Transition
The LIBOR transition continues. As we have outlined in previous notes, we are six years into a global effort to replace LIBOR with more...
July 10, 2019
Market Bids Farewell to the Fed’s Tightening Cycle
The last seven weeks have seen a dramatic repricing of the expected path of monetary policy. As recently as November 8, the fed funds...
January 3, 2019
SOFR, So Good
The LIBOR transition continues. A global effort has been underway since 2013 to reduce dependency on LIBOR, the benchmark interest rate discredited by a...
November 14, 2018
China, the Goliath of the Treasury Market
After the latest round of the trade war, China has imposed tariffs on nearly all of the $130 billion in annual goods imports from...
October 16, 2018
Fed’s Technical Adjustment to IOER is a Sign of Things to Come
It was a surprise to no one when the Federal Reserve hiked rates this past Wednesday. The purpose of this note is to describe...
June 19, 2018
The Phillips Curve is Dead, Long Live the Phillips Curve!
The Phillips Curve describes the relationship between unemployment and inflation. First proposed in 1958, the theory holds that a low unemployment rate reflects a...
December 5, 2017
Fed Takes First Step of $2 Trillion Journey
The Federal Reserve took the first step this week of what will be a long journey towards normalizing its balance sheet after buying nearly...
November 2, 2017
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