Generally, buying a commodity today is less costly than agreeing today to buy for future delivery because of storage costs and risk. Sometimes, however, the current commodity price exceeds the cost of buying it today for future delivery. This describes…
The 2-yr Treasury rate is 1.60%, the 10-yr, 2.00%, a difference of just 40bps. Due to high inflation, the Fed is planning to raise short-term rates by at least one percentage point and maybe 1.75 percentage points by 12/31/22. Raising…
To best understand how inflation is likely to play out, many variables need to be properly forecasted. They are, in no particular order, inflation expectations of workers, bargaining power of workers, productivity growth of workers, pricing power of firms, the…
Since cratering in spring 2020, the US economy has dramatically outperformed the economies of other developed nations. The only exceptions, labor force participation and inflation. While the labor force has recovered or nearly in other wealthy nations, here it’s substantially…
The Friday File: Valentine’s Day spending is expected to total $23.9 billion, almost equal to the GDP of Iceland (the 112th largest economy out of 216), and up from $21.8 billion last year. This remains shy of the $27.4 billion…
The current 117th Congress, running from 1/3/21 to 1/3/23 has passed 85 bills with 11 months to go, and is on a pace to pass just 157 bills. The fewest number of bills passed in any two-year session of Congress,…
The only other time the Fed shrank its balance sheet was in 2018, and rates declined, the opposite of what should have happened. Here is maybe why. As the Fed shrinks its balance sheet it sells bonds and acquires cash…
In 1980, global GDP was $11.2 trillion. The EU accounted for 29%, the US 25%, Japan 10%, China 3%, and the rest of the world 33%. By 2021, global GDP had grown to $85 trillion. The US was tops, again…
January employment grew by a strong 467,000. Moreover, December’s employment was revised up from 199,000 to 510,000 and November’s from 249,000 to 647,000, suggesting Omicron had little impact. Better yet, the labor force participation rate rose from 61.9% to 62.2%…