At Cumberland, we continuously have internal strategy discussions. We decided to make one such discussion, on the subject of inflation and US capacity utilization, available in the form of a commentary to clients, consultants, and all readers. Below you’ll find a summation of our discussion, written by Bob Eisenbeis, Cumberland Advisors Chief Monetary Economist. -David […]
Excerpt from… Vanguard’s market forecasts for 2020 and beyond? Higher, but not as juicy as the 2010 decade. December 31, 2019 – by Erin Arvedlund Inflation Retirees and other investors feel they’re paying more for everyday items, especially health care and tuition, even though the Federal Reserve claims inflation is hovering around 2% annually. Jim […]
The outlook for inflation and for inflation-sensitive financial instruments is still highly uncertain. Note that this prognosis includes TIPS on the bond side and certain inflation-sensitive stock groups on the equity side. The world’s mature economies have been trying to get inflation up to 2% or higher for many years. They’ve had no success. An […]
“Americans will always do the right thing — after exhausting all the alternatives.” Winston Churchill? Abba Eban? An Irishman? Apocryphal? For a history of the quote, see: https://quoteinvestigator.com/2012/11/11/exhaust-alternatives/ . When it comes to interest rates, inflation, and financial markets, that hopeful outcome is being sorely tested. We’ll look at some current evidence of US economic trouble […]
As David Kotok noted in his description of the intellectual discussions that occurred at Camp Kotok in Grand Lake Stream, Maine, one of the topics was so-called Modern Monetary Theory, or MMT. There were four panelists, who were asked to take different sides for the sake of argument, representing positions from the most favorable to […]
This past week we celebrated the 50th anniversary of the Apollo 11 moon landing. Remarkably, only 1/3 of Americans today were alive when that happened. As a 12-year-old kid I was riveted by the space program and tried to digest the minutia of every flight. Like a lot of kids, we watched the moon landing […]
In the wake of the turmoil in Washington, DC, over his performance in Helsinki, President Trump also took a sideswipe at the Federal Reserve, criticizing the FOMC’s recent efforts to normalize policy.
Most presidents – though not all – have understood that Fed independence ensures separation from the Treasury and serves as a check on fiscal excesses. When a central bank takes orders from the fiscal side of government, history shows that inflation and economic decline soon follow.
To no one’s surprise, the FOMC left its target range for the federal funds rate constant at 1.5 to 1.75%. This decision maintains the Committee’s record of no rate hikes at meetings where no SEP forecasts were available and also spaces out its gradual normalization of policy. There is virtually no information in the statement […]
Excerpt below: Stocks moved firmly higher after the latest monthly jobs report showed wage growth had eased, tamping down concerns among investors that bigger paychecks could lead to a rise in inflation and force the Federal Reserve to hasten its pace of short-term interest rates to tame it. “It’s a fantastic report for the economy,” […]