Joseph G. Carson

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The strong gains in the US equity markets during the first half of 2019 were mainly driven by the "hope" of new policies than improving fundamentals. Equity investors have been "hoping" that policymakers will reverse course and lower official rates and also "hoping" international trade disputes would be settled soon and in a way bullish for growth and earning. All of this "hoping" has occurred against a deteriorating picture for earnings and as a result equity investors have pushed market valuations to the highest levels since 2000. How long can the "hope" equity trade last? And does the high level of equities pose a risk to the economy?

Equity investors nowadays have been a "hopeful" bunch as they have been betting on policy changes with bullish outcomes. Yet, the reasons cited for the "hopeful" outcomes are not fully persuasive. All leave room for counterarguments.

First, equity investors are "hoping" that policymakers will lower official rates to sustain the growth cycle. Yet, it is not clear if lower official rates are necessary at this time or that there would be any lift to economic growth or equity market benefit from a lower level official rates. Treasury yields out to 10 years are trading well below the target on official rates so even if policy rates are lowered its not clear that market rates would move any lower from where they are priced today or that there would be any incremental increase in overall liquidity.

Second, equity investors are "hoping" that if policymakers decide to lower official rates that the outcome will be similar to that of the mid-course reduction in official rates that took place in 1995, which was followed by several years of economic growth and double-digit gains in equities. Yet, there are a number of fundamental differences between 1995 and 2019 and the most important is the equity market valuation.

At mid year 2019, the market value of domestic equities is 2X that of nominal GDP (matching the dot.com peak), whereas in 1995, equities were selling at less than 1X nominal GDP. In other words, in 1995 equities were cheap relative to future economic growth whereas today equities appear to be very expensive relative to future economic growth.

Third, equity investors have been "hoping" that trade disputes are less harmful to the US economy and profits given the low share of exports (12%) relative to GDP. However, equity investors are ignoring the fact that roughly 40% of overall corporate earnings are earned outside the US so the impact on profits emanating from slower global growth linked to trade disputes will be significantly larger than any negative impact on the general economy.

Fourth, equity investors seem to be "hoping" that the suspension of the next round of tariffs on Chinese imports is a sign of progress on the trade front. Yet, the Trump Administration is seeking a trade agreement that is heavily tilted in the US favor, so too undo or reverse the large trade imbalance of the past two decades. And, China's is seeking a trade agreement that is fair (equal) to both sides. It's unclear if there is a middle ground here for both sides to claim a win-win outcome. How long will it take before equity investors lose "hope" that US-China trade dispute that may not be resolved soon or in a way that is not bullish for growth or corporate earnings?

Equity market gains often paint a bright and accurate picture of future economic growth and corporate earnings, but it also true that strong financial market gains pose a danger that an overreaction on the upside could be followed by an overreaction on the downside if events do not play out as expected, or "hoped". That is not a forecast or a prediction of what may occur, but merely an observation that equity investors are pinning a lot of "hope" on policy decisions and positive outcomes from all of those decisions and in the meantime are overlooking high valuations and a deteriorating profit picture.


Viewpoint commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
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The strong gains in the US equity markets during the first half of 2019 were mainly driven by the "hope" of new policies than improving fundamentals. Equity investors have been "hoping" that policymakers will reverse course and lower [...]

US Equity Market: An "Oasis" of Hope

Charles Steindel

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The Philadelphia Federal Reserve Bank's estimates of state coincident activity for May show that growth is widespread across the nation, with moderate variation. Over the prior 12 months, 32 states had indexes with gains in the 2 to 4 percent range. Of the outliers, only one big state—Massachusetts—was on the high side, and two—Illinois and Michigan---on the low side. Nevada was yet again the high side leader, with a whopping again show that growth is less intensely centered in the West. Over the 12 months ending in March, Nevada is once again the leader, with a whopping 5.7% increase, far ahead of number 2 Vermont's 4.5%. On the low end, Kansas, Michigan, and Louisiana had gains of less than 1 percent, while Hawaii reported a decline.

Over the three months ending in May West Virginia's 1.9% increase edged out Nevada's 1.8% for the number one spot. Western states generally reported faster growth than those in the East in this period, with seven Western states (including Texas) with increases above 1 percent, with only four Eastern states in that group. Four states showed declines, with Michigan down .5%. In general, Midwestern states were softer than the rest of the nation, with Minnesota and Kansas also down, and meager gains in some of the larger states in the region.

Montana had the largest increase from April to May, barely edging out West Virginia. Seven states had declines, with Michigan's being the largest.

Whiie the overall picture still shows gains across the nation, the latest set of numbers show some softer areas. This report largely reflects the May job numbers, and it is the stronger June national report may show through to better numbers in some regions.
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The Philadelphia Federal Reserve Bank's estimates of state coincident activity for May show that growth is widespread across the nation, with moderate variation. Over the prior 12 months, 32 states had indexes with gains in the 2 to 4 [...]

State Coincident Indexes

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State personal income growth in the first quarter of 2019 averaged somewhat lower in the first quarter of 2019 than in the fourth quarter of 2018, but the variation in growth was fairly narrow. West Virginia reported the highest rate of growth, 5.6%, while South Dakota was the only state seeing a decline. Growth was generally low in the Plains states and some other portions of the Middle West, reflecting a sharp drop in farm income. Elsewhere, income growth in both Connecticut and New York trailed the national pace, reflecting declines in property income (dividends, rent and interest), which bore more heavily on the wealthy residents of those states. The drop in property income types explains why some poor states were relatively strong in the first quarter: Maine and New Mexico joined West Virginia in seeing personal income grow at a rate exceeding 5 percent (Arizona was also in that group).

While the typical focus of this release is on the growth rates, levels of personal income are widely skewed across the states. The aggregate income of California residents in 2019:Q1 was, at an annual rate, more than $2 ½ trillion; that of Vermont residents was less than $35 billion. Thus, a comparison of Vermont’s Q1 growth rate of 4.5% (11th in the nation) to California’s 3.1% (34th) hardly reveals much about how the two stand compared to each other!
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State personal income growth in the first quarter of 2019 averaged somewhat lower in the first quarter of 2019 than in the fourth quarter of 2018, but the variation in growth was fairly narrow. West Virginia reported the highest rate [...]

State Personal Income

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The Federal Reserve appears to be embarking on a new policy. Policymakers appear to be dangling the prospect of more monetary accommodation in order to encourage more risk-taking and use the strength of the asset markets to help them achieve their mandates on growth, employment and inflation. In the past, policymakers would consider asset prices only insofar it was signal of future general inflation. Now it appears policymaker's need or even wants higher asset inflation to help them achieve their mandate on growth and inflation. Will the gamble work?

At the press conference following the June 18-19 meeting of the Federal Open Market Committee meeting Federal Reserve Fed Chair Jerome Powell stated that the Fed “overreaching goal” was to sustain the economic expansion and if needed policymakers would use all of our tools ---interest rates and the balance sheet if necessary---to fulfill their mandates. Mr. Powell also went out his way to telegraph how many policymakers (8) indicated a preference to cuts rates at some point and that a number of others felt the case for easy money had strengthened.

Such comments, with equity prices near record highs, are essentially an endorsement to take on more risk in your portfolio. In the past, policymakers would hint of “monetary accommodation” (the so-called Fed put) to support the market following sharp sell-offs. Yet, the new comments by the Fed Chair was made at a time when stock prices already had strong momentum; it was almost like the Fed chair was sending a “buy” signal to investors.

It would be wrong to overlook the significance or downplay the potential influence of the message sent by the Fed Chair. Comments by the Fed chair not only show the future direction of policy, but also can, and have in the past, influenced individual investment behavior. For example, in 2004 Mr. Greenspan stated, “Many homeowners might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages”. Such a comment, with house prices soaring at the time, was essentially viewed as an endorsement to take on more risk in housing finance. People and lenders did listen---evident by individuals taking on record $3 trillion in mortgage debt in the next three years, and a lot of that was adjustable debt.

One of the potential consequences of this new Fed policy is to add to the “cyclicality” of the household portfolio and income flows. For example, today the market value of equities in individual's accounts and in their mutual fund accounts is twice that of liquid and riskless investments such as time and saving deposits, money market funds and Treasury securities. It was not too long ago that individuals had equal holdings of risky (equity) holdings and riskless (liquid) assets.

The shifting composition of the household portfolio has also tilted the “cyclicality” of income flows. Today, households receive almost as much in dividend payments and they do in interest income payments. In the 1990s, household received $5 of interest income payments for every $1 of dividend payments.

The changing nature of the household's portfolio and income flows is a big positive during growth cycles as large wealth gains and income flows help to augment the spending cycle and boost consumer confidence in the process. But, the downside is that household portfolios are less stable during asset price corrections and income flows do not have the strong stabilizing force as they did in past cycles.

For now, however, the “Fed Put” has been swapped for the “Fed Gamble” as policymakers seem to be purposely encouraging more risk-taking and asset inflation to better ensure the sustainability of the expansion, and help them achieve their mandated objectives on employment and inflation. It is a risky gamble, as the trade-off would appear to be an extended growth cycle in the short run, with the potential of heighten financial instability later.


Viewpoint commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
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The Federal Reserve appears to be embarking on a new policy. Policymakers appear to be dangling the prospect of more monetary accommodation in order to encourage more risk-taking and use the strength of the asset markets to help them [...]

The Fed's "Gamble"

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The May job numbers from the states were comparable to the national figure, showing little change in payrolls. Washington was the only state to have a statistically significant change--an increase of 9,500. Texas, California, and Florida all reported point increases larger than Washington, but none were statistically significant, nor was New York’s drop of nearly 14,000 deemed to be of statistical note. Over the 12 months ending in May, Nevada was in a league of its own, with an astonishing 4.0% increase in jobs—no other state showed growth as high as 3 percent. No state (including DC) reported a decline in jobs over this period, but it may be of note that in fewer than half the states was the rise seen as statistically significant—for instance, Massachusetts, which has generally been seen as one of the strongest states in the Northeast, was not viewed as having a statistically significant rise in jobs from May 2018 to Mary 2019.

Unemployment rates were generally low and fairly uniform across the nation. Alaska was again the outlier on the high side, but its May rate of 6.4% continues a steady decline. DC, at 5.7%, and Mississippi and New Mexico, at 5.0%, were the other high side outliers. Vermont was again the state with the lowest unemployment rate, with the May figure an astonishing 2.1%. More than forty states—including the four largest—report unemployment rates between 2.5 and 4.5%.

Puerto Rico’s travails continued in May. While the island’s May unemployment rate of 8.5% (up a notch from April) was low by historic standards, the number of jobs edged down, and remain below the pre-Maria figure and even further under the historic peak.

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The May job numbers from the states were comparable to the national figure, showing little change in payrolls. Washington was the only state to have a statistically significant change--an increase of 9,500. Texas, California, and [...]

State Labor Markets in May

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As mid-year approaches, helping support from falling rates and the hints of more monetary accommodation from the Fed has driven the impressive double-digit gains in equity markets. Yet, corporate profits, the ultimate driver of equities, have weakened, with two sequential quarterly declines already on the books and more declines likely ahead given the weak macro sales trends and declining margins. When will profits begin to matter again to investors?

According to the Bureau of Economic Analysis (BEA), operating profits in Q1 2019 declined 2.8% from the fourth quarter of 2018, and that comes on the heels of a small (0.4%) decline in Q4. The decline in operating profits is broad-based, with nonfinancial companies faring a little worse, declining 3% in Q1 and 0.6% in Q1.

Top-line revenue growth has clearly slowed. In Q1, nominal GDP growth of 3.6% annualized was the slowest in three years, following a gain of 4% in Q4. However, for the corporate sector the GDP data indicates overall revenue growth was less than 1% annualized for each period.

Profits margins are also being squeezed. According to the GDP data, real profit margins for the nonfinancial corporate sector in Q1 were 12.9%, more than two full percentage points off of the cyclical high of 15.2% reached five years ago.

Profit margins are heavily influenced by the ups and downs of the business cycle in that they bottom at the start of the cycle, hit a peak around the middle or a little bit later in the cycle and then start to decline as the growth cycle ages and costs of doing business start to rise faster than business itself. As such, it is hard to make a bullish case for corporate profits to resume an upward climb due to a rebound in operating margins.

At what point will profits matter to investors is hard to say as investors appear to be placing more weight nowadays on future growth opportunities than current profits. To be sure, a number of unprofitable companies have gone public this year, with several of the new firms share price soaring from the initial public offering price while others have seen their share price slip. As a group, however, investors have given these new publically traded unprofitable companies a market capitalization well into the hundreds of billions.

A recent study of companies that went public in 2018 showed that the share prices of newly traded public companies that were unprofitable fared much better when compared to those that were profitable at the outset. To be fair, the sample was relatively small (about 20 companies in total) yet it still showed how investors placed more emphasis on a business model that “promised” profits than on a business enterprise that was already profitable.

In the end, it all comes down to the simple question of how much are investors willing to pay for current and the prospect of future earnings? Based on current sales and costs trends Q2 operating profits are likely to be below that of Q1, off 2% to 3%, extending the consecutive decline in quarterly earnings to three, and the 2H outlook looks to be soft as well, with bottom-up estimates of equity analysts projecting modest declines.

Nevertheless, investors seem to be willing to overlook the negative trends in profits (as well as outright losses) and base their investment (equity) expectations on the belief that policymakers will be able lower rates, speed-up growth, make profitable companies more profitable and unprofitable companies profitable. This bullish prophecy could soon run into the realization that the weak growth and profit trends are not the result of interest rates or overall financial conditions and that monetary policy has reached the outward bounds of its effectiveness. When investor sentiment shifts, as it surely will do at some point, profits will matter (a lot) and companies that don’t have a clear path to profitability will get hit the hardest.


Viewpoint commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
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As mid-year approaches, helping support from falling rates and the hints of more monetary accommodation from the Fed has driven the impressive double-digit gains in equity markets. Yet, corporate profits, the ultimate driver of [...]

Investors Are Overlooking One (Big) Thing: "Profits"

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Before policymakers decide to provide an insurance cut, or two, against potential destabilizing events in the financial markets, or react to any economic weakness that may be linked to trade disputes it would be prudent on their part to review past experiences. Nowadays the cost-benefit analysis can no longer be limited to the growth and inflation trade-offs but need to also include inferences about how asset markets may respond to policy easing.

In hindsight, hard evidence from past insurance cuts is that they were unnecessary, too large or left in place far too long, triggering sharp gains in already too-hot asset markets, creating economic and financial imbalances in the process, and resulting in the very bad outcomes policymakers were seeking to avoid. Do policymakers want to risk repeating the same mistakes? And do they have any choice?

Looking back, the monetary policy decisions made during the Russian debt default in the summer of 1998 could be considered a watershed moment in the annals of Federal Reserve. To be sure, the decision to act preemptively and decisively without any hard evidence that the economy would be affected by the turmoil proved how sensitive policymakers were to any potential disruption in the domestic financial markets, an action that has been repeated time and again.

At the time of the Russian debt default, the US economy was expanding at a relatively rapid pace. Yet, to be fair, policymakers were unsure how the seizing up in the domestic financial markets would affect the economy. Federal Reserve Chairman Alan Greenspan stated “it is not credible that the United States can remain an oasis of prosperity unaffected by a world that is experiencing greatly increased stress.” Given his concern, Mr. Greenspan engineered three 25 basis point cuts in official rates cuts, one at an emergency meeting, over a short three-month span.

Yet, not only did the US economy show no ill-effects from the financial turmoil, evident by it expanding over 5% and 6% annualized in the third and fourth quarters of 1998, it also become a hot-bed for asset market speculation.

The NASDAQ composite index, which was home to many of the fast rising new start-up tech companies, had already doubled in the previous three years leading up the Russian default, and doubled again in the 14-month period from when policymakers initially eased in September 1998 until they fully reversed the three official rate cuts by November 1999. The NASDAQ eventually climbed another 50% in the early months of 2000, before crashing in late 2000 and beyond, triggering an economic correction and financial instability in the process.

In hindsight, it is difficult to prove one way or the other how the economy would have performed without the easing of monetary policy. Yet it is hard to deny that monetary ease occurring at a time of speculative asset markets did not channel more flows into in the hot equity markets. .

Another period of monetary accommodation staying in place far too long occurred during the period immediately following the dot.com bubble burst. In order to cushion the economy from the bursting of the tech-equity bubble policymakers lowered the federal funds by 550 basis points to 1%, the lowest level in 45 years, in a span of two-and-half years and left rates at 1% for an additional year.

The decision to keep official rates at very low levels was a risky proposition because there was accumulating evidence that record low interest rates was triggering another asset price cycle, yet this time it was in residential real estate. During the 2001-04 period house prices climbed nearly 40%, the largest gains in nearly 30 years, and yet policymakers continued to downplay the rise or even link the move to its official rate policy stance. Even after policymakers started in mid-2004 to lift official rates up in a “measured way” residential prices climbed another 40% over the next three years, before crashing in a dramatic way in 2008 and beyond, not too unlike the dot.com bust.

In the past policymakers had limited information on the full range of possible outcomes associated with an easing or insurance move, but inferences about how the economy and market participants might respond to policy easing can now be drawn from the hard evidence of past behavior during periods comparable to the current environment. Fast rising equity markets, often used as a gauge of the stance of overall monetary policy indicates that policymaker’s run the risk of repeating the mistakes of the past by engineering an easing of policy at this time. Yet, given the political environment and statements by a few policymakers do they have the option not to act?


Viewpoint commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
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Before policymakers decide to provide an insurance cut, or two, against potential destabilizing events in the financial markets, or react to any economic weakness that may be linked to trade disputes it would be prudent on their part [...]

Is The Fed At Risk of Repeating the Mistakes of the Past?

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The Federal Reserve Bank of Philadelphia’s state coincident indexes were again soft in October.. In the one-month changes, South Dakota led with a .67 percent gain, and Connecticut, Ohio, and Delaware had increases above .5 percent. However, the indexes for 13 states declined, with South Carolina and Michigan both down .4 percent (Michigan saw some pronounced retrenchment in autos, and South Carolina would have been hit by the Boeing strike). Over the 3 months ending in September, 12 states were down, with South Carolina (down 1.4 percent) and Massachusetts (off 1.1 percent) once again at the bottom. Connecticut was yet again at the top, with a 1.7 percent increase, with Over the last 12 months, 3 states were down, and 10 saw increases of less than 1 percent. South Carolina’s index was off by 1.2 percent. Arizona had a 4.9 percent increase, and Connecticut was up 4.7 percent, with 7 others up more than 3 percent.

The independently estimated national estimates of growth over the last 3 months (.55 percent) and 12 months (2.55 percent) appear to be roughly in line with the state numbers.

State Coincident Indexes in October 2024

State labor markets were little-changed in October. The Boeing strike, and Hurricane Milton, triggered statistically significant declines in payrolls in Washington and Florida. There were no other statistically significant changes, not even in North Carolina (which did have a insignificant drop). Nonetheless, the sum of payroll changes across the states was -76,400, a clear amount lower than the independent national change of 12,000.

Three states had statistically significant declines in their unemployment rates in October, and one  showed an increase.  None of the changes were larger than .2 percentage point.  The highest unemployment rates were in DC (5.7%),  Nevada (5.7%), California (5.4%), and Illinois (5.3%). No other state had rates as much as a point higher than the national 4.1%. Alabama, Hawaii, Maine, Mississippi, Nebraska, New Hampshire, North Dakota, South Dakota, Vermont, Virginia, and Wisconsin had rates of 3.0% or lower, with South Dakota at 1.9%.

Puerto Rico’s unemployment rate dropped to 5.4%--lower than both DC and Nevada, and matching California--while the island’s job count grew by 2,300.

State Labor Markets in October 2024

The new administration intends to pursue an unconventional fiscal strategy. A key aspect of the strategy involves reducing or abolishing non-defense government agencies in order to create fiscal space to make the current tax law permanent, lower taxes even more, and generate extra revenue through an extensive and significant tariff program.

The success of the fiscal policy of the new administration will depend on the reaction of the bond market, which has historically influenced policy changes. Three decades ago, Bill Clinton pledged a stimulus package if he won the election, but upon taking office, he had to shift towards a "financial market strategy" instead. Stimulus spending was abandoned in favor of a deficit reduction plan to prevent long-term interest rates from increasing. Given the imbalance in the federal budget is much larger today, it is crucial for policy decisions to take into account the bond market's reaction, raising the question whether policymakers will heed the advice as they did in 1993.

The odds are in favor of the opposite happening, as the new administration is not inclined to give in to the pressures of the bond market. If bond yields jump sharply, the administration might urge the Fed to intervene, potentially worsening the situation.

**The Federal Budget**

In the fiscal year 2024, total federal spending reached $6.75 trillion, resulting in a budget deficit of $1.83 trillion. Currently, defense budget and social programs are deemed off-limits, as are interest payments. This shifts the attention towards cutting expenses in non-defense discretionary spending.

During the fiscal year 2024, non-defense discretionary spending amounted to approximately $950 billion. Although non-defense spending had stayed stable in nominal values between 2010 and 2019, it surged in 2020 as a result of economic recovery initiatives through additional legislation. Nevertheless, there is a pattern of downward trend in non-defense expenditure even prior to the upcoming Congressional term, with forecasts indicating a decline to 2.5% of GDP over the next ten years as per the Congressional Budget Office. The smallest proportion of such outlays in the past five decades was 3.1%.

Although additional spending cuts may still occur, the meager budget share allocated to these programs indicates that the extent of budget savings is significantly smaller than advertised. Below are some more reasons why significantly cutting non-defense discretionary spending will pose political challenges.

With a budget of $238 billion, the Department of Education provides support to almost 100,000 public schools through its programs.

With a budget of $106 billion, the Department of Commerce supports research and development in emerging technologies such as artificial intelligence.

With a budget of $460 billion, the Department of Agriculture funds many projects in rural communities, including housing, community facilities, and utilities.

With a budget of $275 billion, the Department of Transportation makes billions of dollars in grants to improve and upgrade all types transportation systems.

Non-defense federal spending plays a critical role in the economy by offering assistance to businesses of different scales and types, along with state and local governments and individuals. This does not imply approval of the Federal budget or its spending preferences, but rather recognizing essential elements concerning federal spending and its economic influence.

Furthermore, handling the distributional effects of significantly reducing non=-defense spending will pose significant controversy and implementation challenges. For example, states in the northeast pay more in federal taxes than they receive in federal spending, while various states in the south, as well as a few in the mid-west and southwest, receive more assistance than they contribute in taxes. This raises the question of whether politicians from states receiving the most aid will support legislation that significantly reduces the assistance provided to their constituents. Every state listed that gets more in federal assistance than they pay in taxes voted for the new administration.

Extending the 2017 tax cuts adds another layer of complexity to the new administrations fiscal plan. The Congressional Budget Office projects that prolonging these tax cuts could result in a $4.6 trillion increase in the deficit over the next ten years. To counterbalance this, Congress would need to enact spending cuts averaging more than $450 billion a year, affecting almost half of non-defense spending. Moreover, there are discussions about proposing further reductions in federal taxes.

Implementing a comprehensive and substantial tariff program could lead to increased revenue. However, the effectiveness of this strategy is uncertain, as it relies on the assumption that foreign trade partners will not retaliate. Additionally, foreign entities play a crucial role in aiding the US in meeting its federal borrowing needs, hence implementing a tariff strategy is like informing your creditor that you intend to cease transactions with them but expect them not to demand repayment of your loans.

The tariff plan could potentially create complications for both the economy and the bond market. Significant risks include the possibility of higher consumer inflation, which may raise the expenses of social programs (such as inflation indexation) and widen the budget deficit. Additionally, it could lead to higher interest rates, affecting policy rates accordingly.

The new administration has expressed interest in influencing the Federal Reserve's interest rate decisions and has even proposed replacing the Fed Chair before his term expires in 2026. Unlike other government agencies that report directly to the President, the Federal Reserve is an independent agency accountable to Congress. Altering the Fed's independence would require legislative action, potentially causing disruption in the financial markets. The odds of changing the status of the Fed is minimal, but that does not mean the new administration will not publicly expressing its views, which pose challenges for the Fed and confusion (volatility) in the financial markets.

The new administration faces a specific challenge when it comes to dealing with the bond market, particularly due to the fact that it is commencing with an excessively large budget deficit that is forecasted to grow over the next decade. The sheer size of the bond market renders it impervious to being swayed solely through rhetoric or public persuasion. Irrespective of the new administration's declarations or viewpoints, the bond market will express its position on fiscal policy. Three decades ago, the Clinton administration changed direction when the bond market rejected a stimulative fiscal plan. If the new administration's fiscal strategy indicates larger budget deficits and increased inflation, the bond market's rejection will be more significant than that of 1993.

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US Equity Market: An "Oasis" of Hope

State Coincident Indexes

State Coincident Indexes

State Personal Income

The Fed's "Gamble"

State Labor Markets in May

Investors Are Overlooking One (Big) Thing: "Profits"

Is The Fed At Risk of Repeating the Mistakes of the Past?