September 14, 2016—LIBOR is a benchmark rate that some of the world’s leading banks charge each other for short-term loans. LIBOR rates can be an indicator of stress in the financial system. Recently three-month LIBOR reached its highest level in more than seven years. Today, the elevation in LIBOR is being attributed to the pending U.S. Money Market Reform and not some impending banking crisis.
August 30, 2016—This week’s report on personal income and spending indicated healthy consumer activity as well as an inflation picture that is playing out as we had expected. This is supportive of our core narrative.
Nominal personal income expanded at a healthy 0.4% month-over-month (m/m) rate from June to July. Headline inflation was flat over the month so real income gains were also 0.4% m/m.
August 24, 2016—It must be August. We’re all coming back from vacation, doing our back-to-school shopping and, of course, eagerly anticipating the comments from Federal Reserve Chair Janet Yellen at the annual economic policy symposium in Jackson Hole, Wyoming. She is scheduled to speak on Friday and we know only the title of her speech: “The Federal Reserve’s Monetary Toolkit.