Fed Chair Powell testimony continues
- lower inflation could work its way into lower short-term interest rates
- not good for monetary policy to be main game in town
- fiscal policy is very powerful; more powerful than monetary policy
The USDJPY has dipped to new session lows and is below the 100 hour MA at 108.491 now. Not running... but lower.
The US stocks are giving up gains with the S&P trading at new lows after breaking 3000 level for the first time. The high reached 3002.98. The S&P just traded to 2984.62
The NASDAQ index is also lower. It is currently trading at 8168.70 after rising to 8228.59. The low reached 8160.56.
The US two-year yield is down to 1.8256%, -8.1 basis points on the day. The low reached 1.8216%
Low rates and stocks falling is helping to pressure the USDJPY. PS the EURUSD and the GBPUSD are not making new session highs...
- corporate leveragerequires serious monitoring
- corporate leverage could be macroeconomic risk
- many of the fantasy a stronger case for easier monetary policy given trait uncertainty, global growth issues
- balance sheet doesn't limit Fed ability to do more QE
- median and lower US incomes have stagnated in a troubling way
- trends in technology, globalization and education are behind stagnant US incomes
- US federal budget is on a unsustainable path
- greater US government debt will mean more spending on interest rather than more important public interests
- We dont expect a downturn but if so would use all tools in our toolbox
- Fed has the tools it needs but it needs supportive fiscal policy in a downturn
