Monthly Archives: September 2017

Yellen for the Win! The Sequel

Wed, SEPT 20th, 2017

Today marks the second time that Fed Chairwoman Janet Yellen has entered uncharted territory. The first was early on in her term winding down years of extraordinary quantitative easing (i.e., “tapering” QE) and ending ZIRP (zero interest rate policy). With today’s announcement the second major undertaking on Yellen’s watch will now commence. Below is our quick take on today’s Fed meeting, via our Twitter account. Of particular note, Yellen – in our view – as it pertains to her work and legacy as chairwoman of the Federal Reserve can proudly proclaim mission accomplished! (though, perhaps, not yet complete).

Meanwhile in show of confidence in both Yellen and her (and her team’s) policy strategy U.S. stocks are up modestly on the news, as are bond yields (read here for our take on the possible impacts of “balance sheet normalization”). Like Bernanke before her, regardless of what happens with Yellen at end of term in January 2018 we thank her for her smart and sober service, steady hand, and masterful guidance to our economy. Not only has she been outstanding as Fed chair, but her shattering of the glass ceiling for female leaders in U.S. central banking is equally as invaluable as her prodigious imprint on monetary policy. *Side note: being selected as an interviewee for that seminal American Banker article – along with Barney Frank, Alice Rivlin, and Christina Romer – is one of my proudest media moments over the years*

Jason L. Ware, MBA / Chief Investment Officer
Albion Financial Group
jware@albionfinancial.com
(801) 487-3700

Inflation is Always and Everywhere a Tricky Phenomenon

Thurs, SEPT 14th, 2017

Great post from Josh Brown regarding today’s hotter than expected inflation reading per BLS data. Read Josh’s quick take here. And, from Bloomberg.

On the news the CME-controlled fed funds futures market is now pricing roughly even odds for a Fed rate hike at the December 13th meeting, up from approximately 30% as recent as one week ago. As I often say, one data point does not a trend make. It’s too early to draw any conclusions from today’s data, particularly given the years-long underlying forces keeping accelerating inflation at bay (low productivity, shifitng structural labor force dynamics, modest capacity utilization). Nevertheless, after calling the June hike correctly (here, here, and here) we’ve been in the 50/50 camp for a December hike, while firmly believing that balance sheet reduction will commence in September. That’s the easy part, though. How this will all ripple through the economy, stock and bond markets in the months and years to come … that’s the bigger question.

Jason L. Ware, MBA / Chief Investment Officer
Albion Financial Group
jware@albionfinancial.com
(801) 487-3700