Last week, U.S. real estate investment trusts (REITs) achieved remarkable performance, topping the major asset classes in returns, as indicated by a series of exchange-traded products. In contrast, commodities faced the most substantial decline during the shortened trading week that ended on February 24.
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● 
The Vanishing Middle Class: Prejudice and Power in a Dual Economy
By Peter Temin
Summary via publisher (MIT Press)
The United States is increasingly polarized, with wealth concentrated among the few and a shrinking middle class. In this thought-provoking book, economist Peter Temin discusses how historical issues—primarily slavery and its legacy—have contributed to the widening gap between the affluent and the impoverished. Temin uses a straightforward dual economy model to explore this divide and suggests actionable steps towards achieving greater equality in America.
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Forecasting economic trends can be challenging, particularly when influenced by political dynamics. Supporters of Donald Trump may anticipate robust U.S. economic growth, while those who backed other candidates might remain doubtful about a significant acceleration in economic activity.
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Officials from the Federal Reserve are deliberating a potential interest rate hike, as indicated by the recently released minutes from the January 31-February 1 monetary policy meeting. This hawkish signal raises caution regarding Treasuries. While the overall bond market faces challenges as interest rates rise, one sector remains resilient: junk bonds.
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According to various forecasts, the U.S. economy is poised for solid growth in the first quarter of this year. This optimistic outlook comes on the heels of a modest GDP increase in the last quarter of 2016. Despite this, futures markets indicate a strong likelihood that the Federal Reserve will maintain current interest rates at the upcoming monetary policy meeting.
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One of the major obstacles for financial modeling lies in limited data. Making risk assessments under such conditions can be particularly challenging. To address this issue, methods like bootstrapping can be employed, where available data is resampled to create potential historical records. Although not flawless, this technique can effectively stress-test portfolios and establish reliable assumptions regarding risk.
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The U.S. equity market excelled among the major asset classes for the trading week up to February 17, according to various exchange-traded products. Conversely, broadly defined commodities experienced a significant downturn, marking the largest decline of the week.
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● Fed Up: An Insider’s Take on Why the Federal Reserve is Bad for America
By Danielle DiMartino Booth
Commentary by author via CNBC
Many hardworking individuals are feeling increasingly excluded from the current economic recovery, sowing seeds of frustration and anger. Unfortunately, many are unaware of how the Federal Reserve’s decisions impact their everyday lives—shaping their financial choices and influencing their long-term security.
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While political risk is becoming more prominent, the U.S. economy has started 2017 on a strong footing. As anticipated, macroeconomic momentum has increased, diminishing the likelihood of a recession to negligible levels for January. Looking forward, projections suggest this favorable trend will persist into the near future.
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Recent data from the retail and industrial sectors reveals contrasting trends for January. While consumer spending surged to its fastest annual growth in five years, industrial production remained stagnant compared to last year. Given the dominance of consumption in the U.S. economy, the retail figures are more likely to influence the Federal Reserve, which is expected to continue its series of interest rate hikes this year. Additionally, rising consumer inflation in January, reaching the highest rate since 2012, adds further pressure on the central bank to adjust policy.
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In summary, financial markets have showcased distinct trends recently, with REITs leading in performance while commodities saw setbacks. Various economic indicators suggest a strong start to 2017 for the U.S. economy, despite underlying political risks. As financial conditions evolve, the influence of the Federal Reserve and consumer sentiment will play significant roles in shaping future economic landscapes.
