Inverted Yield Curve – Economic Outlook Still Trade War Dependent

U.S. 10-Year/2-Year Brief Inversion This morning (August 14), the U.S. 10-Year/2-Year yield spread briefly inverted. Inversion means that the 2-Year Treasury Bill paid a higher interest rate than did the 10-Year Treasury Note. That inversion reversed itself quickly. Many see the inversion of Treasury bond yields as a good forecast of recessions — but not …

Tariff Hike – A White House Shot at the Fed?

The end of Zero Bound in the US? – Consumers Now more than Ever Key to Economic Growth   Fed Lowers Funds Rate July 31, the Federal Open Market Committee (FOMC) lowered the target range for the Federal Funds (Fed Funds) rate by 25 basis points (bps) to a range of 2-2.25%. The rate cut …

Fed Focus – Boosting the Rate of Inflation – Trade War May Help

Boosting the Rate of Inflation—An FOMC Policy Goal The Federal Open Market Committee (FOMC) meets on July 30-31. An important policy consideration will be boosting price inflation in an attempt to reach their sustained 2% symmetric objective. The FOMC basis its symmetric inflation objective on averaging past levels of inflation. Many economic observers question why …

BlackPoint Funds Webinar: Wednesday, July 17th at 5:30 p.m. EDT

Learn About BlackPoint Funds – Two Unique Funds Designed Exclusively for First Capital Advisors Group. Select Alternatives Fund – this fund invests in a “pooled” portfolio with investment managers who have navigated tough markets in the past. Managed Equity Fund – this fund seeks to own stocks in a different way. The objective is to …

Consumers Carrying the Economy and the Fed Funds Rate Outlook

Consumers Carrying the Economy Consumers represent 70% of gross-domestic-product (GDP) spending. Despite signs of slowing business activity, consumer incomes and spending continue to show strength (see Figures 1 and 2). Friday’s better than forecast nonfarm payroll growth of 224,000 jobs gives further underlying strength for consumers to continue their spending in support of economic growth. …

The Fed – The End of Patience – The Dove Arrives – Inflation and Trade

The Fed Eliminates Patience from Its Vocabulary The FOMC yesterday removed the word “patience” from its vocabulary and the text of its statement after its June meeting.  Clearly, the FOMC indicated that it would likely reduce the Fed Funds Rate in July.  Without diving into all the words in its statement,  the last phrase in …

Trade War – Neither China nor the U.S. Benefit

The U.S. Economy Shows Mixed Signs The recent mix of economic results suggest that neither China nor the U.S. economies will likely emerge unscarred from the trade war. The New York Fed’s Empire State Manufacturing Survey fell in June at its largest monthly decline on record (see Figure 1). Overall, the composition of various components also showed …

Why Now the Mexican Tariff Threat?

Why Now the Mexican Tariff Threat? — Mexico — A Winner in the Trade War — With China — U.S. Winners as Mexico Wins Tariff Threat Against Mexico — Why Now? A brief note after the tariff threat the President made against Mexico and the resulting agreement. In our view, the timing of the President’s …

China – The Great Digital Wall

China – The Great Digital Wall – Balkanization of the Internet -Supply Chain ABC’s   Napoleon’s Warning — China the Sleeping Giant The trade war with China could not fail to bring to mind Napoleon’s often cited quote on China which seems to be coming to fruition — “China is a sleeping giant. Let her sleep, …