The Federal Open Market Committee unsurprisingly voted to maintain rates at 5.25% to 5.5%. The numerous cuts others were anticipating are completely off the table, as the central bank said there might be one reduction for the year compared with their optimistic forecast made in March of three rate reductions in 2024. “In recent months, […]
John Maynard Keynes in his 1936 book, ‘The General Theory of Employment, Interest and Money,” argued aggregate demand was too volatile to be stable and would lead to inflation or recessions. His theory honed in on spending as a means of price control. Low aggregate demand, Keynes argues, would lead to high unemployment and stagflation. […]
COMMENT: Marty, I attended your Toronto Institutional session when the Bank of Canada had a table of 10 people. People would ask you what the central banks were looking at, and you would respond. Everyone then turned to see if they flinched. They were the best of times, as they say. For us long-timers, it […]
COMMENT: Marty, I attended your Toronto Institutional session when the Bank of Canada had a table of 10 people. People would ask you what the central banks were looking at, and you would respond. Everyone then turned to see if they flinched. They were the best of times, as they say. For us long-timers, it […]
The history of interest rates is provided on this site. Interest rates in a developed economy reflect the “option” value on the expected decline in purchasing power of money. If I expect it to decline by 5%, then I expect a profit, and say want 8%. You in turn will pay the 8% only if […]
Economics is well known for rather unrealistic theories based upon fundamentally unsound principles, such as the assumption that all things remain equal. Reality parts with academics whenever such assumptions are drawn to a foregone conclusion. However, greater false assumptions, which go unnoticed, lie at the foundation of so many theories in economics – primarily the […]
It is crucial to understand correlations as EVERYTHING fluctuates! There is absolutely nothing that remains constant. You MUST understand that correlations are NOT one for one, and often show changes in advance of turns. It is a lot to keep track of but this is why I try to post a global view to help you see the world […]
Retail sales in the US fell short of expectations this month, according to data compiled by the Commerce Department. Retail spending decreased 0.6% from April to March, undermining forecasts of a 0.4% decrease. Yet, Americans are spending MORE on the essentials such as groceries. How is this a shocking admittance to anyone? Even online sales […]
Powell reiterated this week that he does not see any short-term need to lower interest rates. The Fed remains delicate in its speech to the public. They knew that inflation would continue rising due to various factors but had to say they were awaiting incoming data. The data is in for Q1 and nothing indicates […]
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