Econ70

After months of speculation, the Fed left interest rates unchanged. They expect to bump rates a quarter-point before year end, and anticipate raising rates by one percentage point per calendar year until the fed funds rate reaches 3.5% in 2018.…

The weakening of the Chinese economy impacts the US economy very indirectly. The US exports about $10 billion/month to China, slightly more than 0.5% of GDP and just 7% of all US exports, but imports about $40 billion/month. Slower Chinese…

The Good: unemployment is low and monthly job growth vastly exceeds the number of new job entrants. The bad: wage growth has been flat for years and inflation is non-existent (due to transitory factors such as falling gas prices and…

Many big banks have just agreed to pay almost $2 billion to settle allegations of rigging credit derivative markets. This comes on top of billions in penalties for rigging foreign-exchange, interest rate (LIBOR), and commodities markets. Worse, many were also…

The Friday File: On Wednesday, Queen Elizabeth II became the longest reigning British monarch — and the 48th longest reigning monarch of all-time — eclipsing the record of 63 years seven months and two days set by her great-great-grandmother Queen…

Despite Internet apps like TaskRabbit, Fiverr, and Uber that more easily than ever afford people the opportunity to work for themselves, the share of Americans who are self-employed has declined to 6.5% today, from 7.7% in 2005 and 8.5% in…

Emerging market economies that export substantial raw materials face difficult choices. If they reduce interest rates, their currencies fall, inflation rises, capital quickly leaves and living standards decline. If they raise rates to protect their currency, investment and manufacturing will…

Friday’s employment data was good. The unemployment rate fell from 5.3% to 5.1%, employment growth in June and July was revised up, hours worked rose, the labor force participation rate didn’t fall and August earnings/hour rose 0.3%, 0.1% more than…

The Friday File: With Mount McKinley now Denali, the tallest presidential peak in the USA is Colorado’s Mount Lincoln at 14,293 ft. (23rd tallest in US), followed by Washington’s Mount Adams at 12,281, Oregon’s Mount Jefferson at 10,497, NH’s Mount…

The combination of falling global and tepid US growth has resulted in very low long-run inflation expectations which has caused long-term interest rates to continue falling. Moreover, the Fed will soon raise short-term rates. This will marginally reduce bank incentives…