The Federal Reserve is likely to maintain its current interest rates during today’s FOMC policy meeting, keeping the target Fed funds rate within a 0.25% to 0.50% range. However, the recent rise in the effective Fed funds rate (EFF) indicates a potentially hawkish sentiment brewing within the Fed.
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The US economy is anticipated to show a significant rebound in this Friday’s preliminary GDP report for the second quarter. Most forecasts indicate that the Bureau of Economic Analysis will reveal an output growth of over 2% in Q2, a notable improvement from the modest 1.1% growth in Q1 GDP (seasonally adjusted annual rates).
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Last week, US real estate investment trusts (REITs) showcased impressive performance, delivering the best results among major asset class ETFs for the five trading days ending July 22. US REITs also maintained their leading position for the trailing year.
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● Overcomplicated: Technology at the Limits of Comprehension
By Samuel Arbesman
Review via Publishers Weekly
In this insightful work, Arbesman, a self-proclaimed “complexity scientist,” presents a framework for comprehending and interacting with complex technological systems. He argues that these systems have grown so intricate that even their creators struggle to understand them fully and often face difficulties when unexpected failures occur. Through various examples, he illustrates issues arising from increasingly sophisticated systems like traffic management, stock market operations, machine translation, and medical technology.
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There is a persistent myth that monitoring the business cycle is futile for investors. While this argument appears logical—by the time a recession is evident, it may be too late to adjust equity positions since markets have already reacted—historical data tells a different story. Careful recession risk monitoring can help investors dodge the worst effects of market downturns prompted by economic contractions. Many are skeptical, and rightly so, given the overwhelming volume of misleading commentary in macro market discussions. However, it is essential to sift through this noise and focus on the data.
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Utility stocks continue to show robust upward momentum, maintaining their status as leaders within US sectors for one-year total returns based on ETF proxies. Despite their strong performance throughout the year, some analysts express concern. For example, Brian Krawez from Scharf Investments recently advised avoiding utilities due to their high valuation multiples compared to historical averages. While this may hold some truth, the technical outlook for this sector remains strong, and it’s unclear when the momentum will wane.
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The initial half of 2016 has presented challenges for the US economy; however, the overall trend suggests solid growth, which appears sufficient to prevent a new recession. The primary factors supporting this expansion are job growth and consumer spending.
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The three-month average of the Chicago Fed National Activity Index (CFNAI) is projected to rise in Thursday’s June report, according to The Capital Spectator’s average point forecast derived from various econometric models. The average estimate of -0.17 suggests a moderate improvement over the prior month. Although this forecast indicates that US economic growth is still trailing below the historical trend rate, it also points to a CFNAI reading over the last three months that is significantly above the level signifying a new NBER-defined recession.
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Predictions of sharply rising inflation in the US have circulated since the end of the Great Recession in mid-2009. Many analysts argue that the Federal Reserve’s extensive monetary stimulus will eventually trigger runaway inflation. Yet, these expectations have not aligned with actual figures. Following last month’s strong payrolls report, inflation hawks have a renewed focus. Could this time be different? To explore this, it’s important to examine the historical connections between inflation and wage growth.
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Emerging-market equities led global stock markets higher during the trading week that ended on July 15, according to a collection of ETF proxies for the major asset classes. In contrast, most fixed-income categories experienced declines last week.
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This revised article maintains a structured format and enhances clarity and flow while keeping the essential details intact. The introduction highlights the significance of the discussed economic trends. The conclusion complements the analysis, reinforcing the overarching themes.
