Monetary Policy

Key Events In The Coming Week: Trump Inauguration, Davos, Theresa May, ECB, China GDP

The week ahead will be a busy one, with a plethora of events including the Davos shindig, where particular focus will be on Chinese President Xi Jinping, the first Chinese president to attend. China will also announce GDP on Friday, which also marks the inauguration of Donald Trump as the 45th US president. Tuesday brings Theresa May's long-awaited Brexit speech.

As Wall Street Tries To Trade On Trump's Tweets, Problems Emerge

A problem has emerged as Wall Street scrambles to trade on Trump tweets: while HFT strategies can quickly identify that a stock was referenced in a tweet, isolating if the actual message is bullish, bearish or indifferent presents a major challenge.

Futures Rise On Friday 13th Ahead Of Deluge Of Bank Earnings; Dollar Continues To Decline

European shares rose as Fiat rebounded on hopes concerns about parallel to Volkswagen are overblown, Asian stocks were little as Chinese shares fell to the lowest level of 2017 after poor export data, and U.S. equity-index futures rose ahead of a deluge of bank earnings. The dollar is headed for a weekly loss and gold trades at the highest price in almost two months.

Just 3 Things

Importantly, with economic growth anemic, consumers stretched and an economy heading into one of the longest post-recessionary expansions on record, there is little room for a policy misstep at this juncture. Maybe Trump will be wildly successful and the economy will come roaring back. That is a possibility. But there is also the risk it won’t. Optimism is one thing. Your personal capital and financial health is quite another.

BofA Warns Of 'Icarus' Trade: "A Wobble Then A Melt-Up... Followed By A Melt-Down"

"After a Jan/Feb wobble, we believe stocks & commodities will have one last 10% meltup in H1," explains BofA's Michael Hartnett in his latest note, but, he adds, by the end of 2017 we will see a "meltdown." BofA awaits the endgame of the so-called "Icarus Trade" amid unambiguous signs of bullish investor Positioning, bullish Profit expectations & hawkish Policy from Fed/ECB, as well as outperformance from laggard risk assets; before calling for the Big Short.

Hoover's Folly

It is premature to make investment decisions based on rhetoric and threats. It is also possible that much of this bluster could simply be the opening bid in what is a peaceful renegotiation of global trade agreements. Regardless, we must pay close attention as trade conflicts and their consequences can escalate quickly.

Who Will Trump Pick As Next Fed Chair?

Reinhart discusses possible Federal Reserve appointments under a Trump administration. The front-runner, in his opinion, seems to be John Taylor...

UK Labour Leader Slammed For "Totally Idiotic" Salary Cap Plan

UK Labour Party leader Jeremy Corbyn has a brilliant idea to 'fix' the supposed income-inequality problem - impose a maximum limit on how much people can earn in Britain. This proposal was immediately met by derision by economists and leaders as "incoherent", "it doesn't make any economic sense at all, and "totally idiotic" - all of which are completely correct.

Fed Remits Only $92 Billion To Treasury In 2016, Lowest Since 2013

The world was reminded of the cozy relationship between The Fed and The Treasury again today as Janet sent Jack $92.0 billion of freshly ponzi'd net income for 2016 providing the federal government with an important source of funding. This, however, is down almost 6% from 2015 and despite a considerably larger balance sheet is the lowest remittance since 2013 due to doubling the handouts to the major banks to $12 billion last year.

Richmond Fed's "Uber-Hawkish" President Jeffrey Lacker To Retire

Just three months after Atlanta Fed president Dennis Lockhart announced he would step down as president, on Tuesday another FOMC member, the uber-hawkish president of the Richmond Fed, Jeffrey Lacker, 61, also decided to call it quits as well, and on Tuesday said he will retire as president and chief executive officer of the Federal Reserve Bank of Richmond on Oct. 1, after 28 years at the Richmond Bank.