federal reserve - Complexity Everywhere

federal reserve

A collection of 11 posts

Is Inflation the Fed's Fault?

Is Inflation the Fed's Fault?

It seems, the Federal Reserve is everyone's bogeyman for inflation. But are they to blame? And could it be worse if it's not their fault?

Should You Stop Worrying About Inflation?

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Should You Stop Worrying About Inflation?

Markets and people may be wildly overpricing the risk of inflation. This would be the most widely telegraphed economic collapse ever. Bad things happen when people least expect them. Maybe it's not as bad as the pundits are saying. Let's look at the data.

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

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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's Pandemic

bitcoin Featured

Bitcoin's Pandemic

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

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

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 [https://en.wikipedia.org/wiki/Federal_republic]. We have the most robust state and local government bureaucracy

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

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

Optimism is on the Menu; A Recession is Not

Optimism is on the Menu; A Recession is Not

The yield curve has inverted, the trade war [https://complexityeverywhere.com/believe-me-when-i-say-to-you-i-hope-you-love-a-trade-war-too/] seems to be in early innings, and economic data is being revised [https://www.marketwatch.com/story/us-created-500000-fewer-jobs-since-2018-than-previously-reported-new-figures-show-2019-08-21] downward. Forecasters are warning of a recession and even financial panic. CNBC has been replete with talk of markets in

A Data-Driven Fed Wouldn't Cut Rates

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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

Can Neural Networks Learn to FedSpeak?

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 [https://www.cmegroup.

"Often Wrong, Never in Doubt"

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 [https://www.facebook.com/econclubny/videos/2248264695265915] on June 3, 2019. It was

Is the Fed Really 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 [https://www.bea.gov/data/personal-consumption-expenditures-price-index] its Personal Consumption Expenditures Price Index. This index, otherwise known as the PCE Deflator, is the Fed’s