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Fed Declares Mission Accomplished

Research Report: December 13, 2023 The Federal Reserve declared victory today, projecting a soft landing as its base case in the years ahead, with more cuts in short-term rates, and with inflation gradually getting back to its 2.0% goal without a recession....

What Should the Fed Do? How About Nothing?

Commentary: Week of December 11, 2023 For the first time in roughly fifteen years, interest rates in the United States are about right.  In economics, we call it the “neutral” or “natural” rate.  The Taylor Rule says rates should be higher, and our model that uses...

Disinflation, Not Deflation

Commentary: Week of December 04, 2023 New home prices are much lower than a year ago.  The average price of a new home sold in October was 10.4% lower, while the median price was down 17.6%. Records on new home prices go back all the way to the Kennedy Administration...

Argentina: Is the Pendulum Swinging, Again?

Commentary: Week of November 27, 2023 When Argentina entered the 20th Century, its prospects looked bright.  On a per person basis, its economy was on par with Canada and Sweden and about two-thirds of the United States. This all changed in 1946 when the country...

Consumer Spending Set for Slower Growth

Commentary: Week of November 20, 2023 Now that we’re about to enter the Christmas shopping season, expect even more focus than usual on the consumer over the next several weeks. We are supply-siders and so usually cringe when we hear analysts and investors dwell on...

Stocks Look Pricey

Commentary: Week of August 28, 2023 At the heart of our assessment of the stock market is our Capitalized Profits Model. That model takes economy-wide profits (excluding profits or losses generated by the Federal Reserve) quarter by quarter going back nearly seventy...