Why the Fed Is In a Pickle

Why the Fed Is In a Pickle

Excerpt from Barron’s – Aug. 2, 2019

To be considered for this section, material, with the author’s name and address, should be sent to MarketWatch@barrons.com.

Cumberland Advisors Robert "Bob" Eisenbeis Ph.D. In The NewsCumberland-Advisors-Robert "Bob" Eisenbeis Ph.D. In-The-News

Boeing Woes Ding GDP

Cumberland Advisors Market Commentary
by Cumberland Advisors
July 30: This quarter’s gross-domestic-product number contained a couple of interesting twists. Only two categories accounted for positive growth—consumer spending and government spending. The consumer number is especially interesting since it accounted for 2.9 percentage points of growth, while government spending added 0.9 percentage points.…Finally, there is a wild card in trying to figure out how much of an impact the problems with the Boeing MAX 737 may have on both domestic production and international trade. We know that the Saudis have cancelled a 50-plane order, and there have been related cuts in parts and components, as well. Mike Englund of Action Economics estimates that Boeing’s impact took about 0.2 percentage point off GDP growth in the second quarter, and without the MAX problem, export growth would have been -3.2 instead of -5.2%, and equipment growth would have been 2.7% instead of only 0.7%.

–Robert Eisenbeis

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