federal reserve - Complexity Everywhere

Pessimism is Easy. Optimism is Less Easy. Preparedness is Downright Hard

It's easy to be pessimistic about markets. A clear bull case remains, but there are signals that suggest caution is the needed.

bitcoin

Bitcoin's Pandemic

Bitcoin and other cryptos may be on the verge of a much larger drop.

covid-19

There's Reason to be Optimistic About the COVID-19 War

As much as I believe in an immediate national shutdown for 30-45 days with a complete economic backstop, that appears unlikely for now. America is not an autocracy, it is a federal republic. We have the most robust state and local government bureaucracy on the planet. A lot of power

deep learning

Odds Increase That the Fed Doesn't Cut Rates This Week

Another FOMC decision is upon us. Expectations are for a 25 bps cut. Equity markets are near all-time highs and US economic data continues to be resilient. A communications embargo has limited public FOMC communications. NLP analysis of available FOMC communications suggests a much lower likelihood of a rate cut

deep learning

Optimism is on the Menu; A Recession is Not

The yield curve has inverted, the trade war seems to be in early innings, and economic data is being revised downward. Forecasters are warning of a recession and even financial panic. CNBC has been replete with talk of markets in turmoil. A good part of the country is apoplectic about

artificial intelligence

A Data-Driven Fed Wouldn't Cut Rates

TL;DR on Fed Rate Cuts The Federal Reserve Open Market Committee (FOMC) announces its rate decision on Wednesday. A robust review of economic data does not support a rate cut; I built both a neural network and random forest model trained on 72 economic indicators (monthly data going back

artificial intelligence

Can Neural Networks Learn to FedSpeak?

Deciphering FedSpeak1, the words and intentions of the Federal Reserve, has become a full-time job in financial markets and media. And markets have placed their bets leading up to the July 31 Federal Open Market Committee (FOMC) decision. As of today, the widely watched CME FedWatch Tool (which calculates probabilities

federal reserve

"Often Wrong, Never in Doubt"

Stan Druckenmiller’s Economic Club Speech – Part 1 The statement “often wrong, never in doubt” from famed investor Stanley Druckenmiller got a good laugh from the audience at The Economic Club of New York, where Druckenmiller spoke on June 3, 2019. It was a master data-driven

federal reserve

Is the Fed Really Data-Driven?

Markets are 65% certain of a rate-cut by year-end. Are they right? This morning, the Bureau of Economic Analysis in the U.S. Commerce Department released its Personal Consumption Expenditures Price Index. This index, otherwise known as the PCE Deflator, is the Fed’s preferred gauge to measure inflation. According