Investors Cheer the Fed’s Rate Cut The Federal Reserve implemented a significant policy shift last month with a larger-than-expected 50 basis point (bp, 1 bp = 0.01%) rate cut to 4.75 – 5.00%. This is the first time the Fed…
A Fed Rate Cut and Your Mortgage Rate A recent online advertisement from a major bank read, “The Fed just lowered interest rates. Could refinancing save you money?” There is an implicit assumption in the ad that the Fed’s half-percentage…
Boom—Fed Opts for 50 On Wednesday, the Federal Reserve announced a 50-basis point (bp, 1 bp = 0.01%) rate cut for the fed funds rate to 4.75 – 5.00%, its first reduction since 2020. The announcement marks the end of…
A Green Light for the Fed—in Three Graphs All indications point to a rate cut by the Federal Reserve this week. What’s behind the Fed’s rationale? Let’s look at three key metrics. Aided by lower gasoline prices and stable prices…
Then and Now Overbuilding, speculation, and easy access to credit encouraged a housing boom and a bust in the 2000s. Sales cratered later in the decade, and along with it, prices tumbled. Today, housing sales have plummeted once again. According…
Powell’s Victory Lap Speech (sort of) Fed Chief Powell’s much-anticipated speech against the picturesque backdrop of the Grand Tetons in Jackson Hole, WY, virtually assures that the Fed will reduce interest rates next month. In a short 16-minute speech, Powell…
Economic Anxieties Subside Markets settled down in Japan, and the latest economic reports in the U.S. aren’t signaling that the economy is headed for an imminent recession. These factors sparked a strong rally in U.S. stocks last week. Led by…
A Rollercoaster and the Carry Trade Ask the average investor what inflation or unemployment is, and they can probably give you a good working definition. Ask them about the ‘carry trade,’ and you’ll likely get a blank stare. Even the…
A September Rate Cut is on the Table, Softer Economic Data Raises Worries As expected, the Federal Reserve kept its key rate, the fed funds rate, unchanged at 5.25 – 5.50%. After holding the fed funds rate steady for a…
Brisk Pace for GDP The U.S. Bureau of Economic Analysis reported that the Gross Domestic Product (GDP), the largest measure of goods and services, expanded at a brisk annualized pace of 2.8% in the second quarter. That’s up from 1.4%…
