Job Growth Slows

From Thomson Reuters – Re-Blogged From  Newsmax 

U.S. job growth slowed more than expected in August after two straight months of hefty gains, but the pace of increase should be more than sufficient for the Federal Reserve to announce a plan to start trimming the massive bond portfolio it built to support the economy.

Persistently sluggish wage growth could, however, make the U.S. central bank cautious about raising interest rates gain this year.

The Labor Department said on Friday nonfarm payrolls increased by 156,000 last month. The economy created 399,000 jobs in June and July.

“We see nothing here that prevents the Fed from initiating its balance-sheet reduction plan at the September meeting,” said John Ryding, chief economist at RDQ Economics in New York.  Continue reading

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The Fed Just Admitted It No Longer Has A Clue What’s Going On

By Graham Summers – Re-Blogged From http://www.Gold-Eagle.com

The Fed July FOMC minutes that were released last week were nothing short of extraordinary. However, to fully appreciate just what the Fed admitted, we first need a little background.

From November 2016 until June 2017, the Fed was pushing a hawkish agenda. The running mantra at this time was that the Fed would raise rates 3-4 times in 2017. As the year progressed, the Fed also began talking about shrinking its balance sheet.

The Fed’s justification for these moves was that inflation was rising and the economy was strong enough to tolerate these moves. As a result the Fed hiked rates twice, first in March and then again in June 2017.

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Bond Bear Bubbleheads

By Brady Willet – Re-Blogged From http://www.Silver-Phoenix500.com

Conventional wisdom holds that with central banks’ beginning to throw their experimental policies into reverse the strings holding the asset price boom together are slowly being cut.  No disagreement here. But while the divergence between the fundamentals and asset prices suggests things like equities are in/near bubble territory, the bond market is not so much a ‘bubble’ as simply a rigged game. Some would disagree…

Former Fed Chairman Alan Greenspan recently offered his opinion about market ‘bubbles’ (or the very subject matter he spent his tenure at the Fed proclaiming could never be identified):

“By any measure, real long-term interest rates are much too low and therefore unsustainable. When they move higher they are likely to move reasonably fast. We are experiencing a bubble, not in stock prices but in bond prices. This is not discounted in the marketplace.”  Bloomberg

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Is The Yellen Fed Planning To Sabotage Trump’s Presidency?

By Stefan Gleason – Re-Blogged From http://www.Silver-Phoenix500.com

The Federal Reserve can make or break a president.

Monetary policy influences all financial markets as well as the cycles in the economy. No president wants to have to run for re-election when the stock market and economy are turning down.

Recall that President George H.W. Bush was sitting on sky-high job approval numbers in 1991 and was expected to coast to victory in his 1992 re-election bid. But then the economy swooned toward recession, giving Bill Clinton the opening he needed.

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Fed QT Bearish For Stocks

By Adam Hamilton – Re-Blogged From http://www.Gold-Eagle.com

Ominously for the stock markets, the Federal Reserve is warning that quantitative tightening is coming later this year.  The Fed is on the verge of starting to drain its vast seas of new money conjured out of thin air over the past decade or so.  The looming end of this radically-unprecedented easy-money era is exceedingly bearish for these lofty stock markets, which have been grossly inflated for years by Fed QE.

Way back in December 2008, the first US stock panic in an entire century left the Fed frantic.  Fearful of an extreme negative wealth effect spawning another depression, the Fed quickly forced its benchmark federal-funds rate to zero.  Once that zero-interest-rate policy had been implemented, no more rate cuts were practical.  ZIRP is terribly disruptive economically, fueling huge distortions.  But negative rates are far worse.

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The Fed May Show Trump No Love

By Peter Schiff – Re-Blogged From http://www.Gold-Eagle.com

Typically, US Presidents are wary of claiming stock market performance as a referendum on their success. Most have seemed to understand that taking credit also means accepting blame, and no one would want to make the tortured argument that the positive moves reflect well on their presidency but that the negative moves do not. But Donald Trump has shown no reluctance to make any argument that suits his political purpose of the day, no matter its absurdity, and no matter if he has to contradict the arguments he made last year, or last week. Perhaps he assumes, as most investors seem to, that the risks are minimal because the Federal Reserve will jump in to save the markets if things turn bad. But in binding his performance so closely to the markets he overlooks the possibility that the Fed will be far less charitable to him than it was to Obama.

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Jobs and Inflation: Gradually and Then Suddenly

By Ben Hunt – Re-Blogged From Wolf Street

If you’ve been reading my notes immediately before and after the June Fed meeting (“Tell My Horse” and “Post-Fed Follow-up”), you know that I think we now have a sea change in what the Fed is focused on and what their default course of action is going to be. Rather than looking for reasons to ease up on monetary policy and be more accommodative, the Fed and the ECB (and even the BOJ in their own weird way) are now looking for reasons to tighten up on monetary policy and be more restrictive. As Jamie Dimon said the other day, the tide that’s been coming in for eight years is now starting to go out. Caveat emptor.

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