March 1, 2019— On March 2, the specter of the country’s swollen debt levels (the accumulation of budget deficits and surpluses over history) will return to the forefront of market attention once again, as the federal government approaches the deadline for reinstatement of the debt ceiling (the limit on government borrowing set by Congress).
December 20, 2018 – The Federal Open Market Committee (FOMC) hiked the target Fed Funds rate as expected yesterday by 25 basis points from 2.25% to 2.50%. The statement and press conference suggested that the outlook for the U.S. economy was one of decelerating but still solid growth, underscored by labor market tightness. However, it also highlighted, as we expected, that the Fed will likely have to slow its pace of hikes in 2019 and is more uncertain about the path of hikes going forward.
Fed Chair Powell’s speech at the Economic Club of New York on November 28 brings to mind “The Twelve Days of Christmas,” the age-old English Christmas carol that seems to be ubiquitous on the radio and in stores around this time of year. After Powell’s notably hawkish Oct 3 comments about rates being “a long way from neutral”—precipitating a sharp market selloff from which the market has not yet fully recovered—his latest comments took a more dovish tone.