Inflation as measured by the CPI is 2.1%, as measured by personal consumption expenditures (PCE) is 1.6%, below the Fed’s 2% target. Importantly, the Fed uses the PCE to monitor inflation. Historically, the PCE is 0.5% lower than the CPI,…
The Friday File: Dividing the cost of a beer by the minimum wage tells you how much work it takes to buy suds. Amazingly, it takes 12 minutes to afford a beer in Puerto Rico and 18 minutes to buy…
The current fight between book publisher Hachette and Amazon over pricing is one between a cartel (the publishers) and a monopolist (Amazon). Turns out e-books are 40% more profitable for publishers and 40% less remunerative to authors than hardcover books!…
At today’s press conference, Fed Chairwoman Yellen did away with forward guidance. Instead, she suggested that the Fed will rely on an array of lagging economic indicators to set policy. She is signaling that the Fed will keep interest rates…
Across the pond, the UK economy is really picking up. Employment is up sharply, real GDP rose 3.1% in the first quarter, the best growth since 2008, the labor force participation rate is 72.9%, the highest it has been almost…
While expecting Q1 GDP growth to be revised down to an annualized rate of -2% from the current -1%, expect the Fed to keep tapering on autopilot and reduce it by another $10 billion to $35 billion/month at the conclusion…
The Friday File: While 32 teams compete in the World Cup, only a handful have a chance at winning and Team USA isn’t one of them. Brazil, Argentina and Germany are clear favorites with Columbia, Netherlands, Portugal and Uruguay as…
The LA County judge that struck down California’s teacher tenure laws as unconstitutional is following in the footsteps of Brown V. Board of Education. In Brown, the Supreme Court forced all schools in a district to have demographically similar student…
Rather than using a cannon, last week the ECB used a popgun. By reducing the rate it charges banks on loans and by charging banks on deposits held at the central bank, the ECB hopes to spur lending. It won’t…
President Obama’s decision to give student loan borrowers the option of limiting loan payments to 10% of their income and to forgive all balances after 20 years — 10 years if the borrower works for government — is harmful. It…