We have provided clients (and later, blog readers) with value in understanding UK real sector dynamics ahead of most others.
Unfortunately we have not provided the same accuracy for the US.
We predicted more US economic weakness than has materialized. This was tied to our view that risk takers would quail, in the face of 1) a statist administration and 2) an interventionist Fed. Planners at both organizations could come to no good, and they haven’t. But developments have not been as rough as we expected. We’re off to a slow start to Q3 but we thought earlier that we would be nearly flat.
Next, we don’t have an edge; we can’t sense where most analysts have gone wrong, if at all. We can’t sense value at the moment. And so with interest rates, we can’t offer strategy either within the US or against other sovereign credits.
And then there’s the good ‘ol Fed. Most of us long for the day when the tinkering will end.
Our advice to this organization is as follows: Step one is to set a target, say the PCE deflator at 2%. Forget the dual mandate – it is redundant and a lot of nonsense. Step two is to eliminate interest paid on excess reserves. Step three is to dust off the NY desk and use FF’s as the preferred tool, ongoing. Then sit on your hands.
At one point in our career we were able to strong arm the Fed to listen (with a little help from Congress) and to insist on results. This time around we can only hope.
Robert Craven
Unfortunately we have not provided the same accuracy for the US.
We predicted more US economic weakness than has materialized. This was tied to our view that risk takers would quail, in the face of 1) a statist administration and 2) an interventionist Fed. Planners at both organizations could come to no good, and they haven’t. But developments have not been as rough as we expected. We’re off to a slow start to Q3 but we thought earlier that we would be nearly flat.
Next, we don’t have an edge; we can’t sense where most analysts have gone wrong, if at all. We can’t sense value at the moment. And so with interest rates, we can’t offer strategy either within the US or against other sovereign credits.
And then there’s the good ‘ol Fed. Most of us long for the day when the tinkering will end.
Our advice to this organization is as follows: Step one is to set a target, say the PCE deflator at 2%. Forget the dual mandate – it is redundant and a lot of nonsense. Step two is to eliminate interest paid on excess reserves. Step three is to dust off the NY desk and use FF’s as the preferred tool, ongoing. Then sit on your hands.
At one point in our career we were able to strong arm the Fed to listen (with a little help from Congress) and to insist on results. This time around we can only hope.
Robert Craven
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