Vital Statistics:
| Last | Change | |
| S&P futures | 3009.5 | 5.25 |
| Oil (WTI) | 54.37 | -1.44 |
| 10 year government bond yield | 1.68% | |
| 30 year fixed rate mortgage | 3.89% |
Stocks are higher this morning after the European Central Bank cut rates and announced new stimulus measures. Bonds and MBS are up.
The European Central Bank cut its deposit rate to -50 basis points from -40 bps and re-instated bond purchases of 20 billion euros a month. This is sending down yields, with the German Bund now trading at -62 basis points. Separately, the Bank of Japan is also looking at measures to push their negative interest rates even lower.
Inflation remained under control with the consumer price index up 0.1% MOM / 1.7% YOY. The core rate, which strips out food and energy rose 0.3% MOM / 2.4% YOY. Medical care and shelter drove the increase in the index, while lower energy costs pushed it down.
Initial Jobless Claims fell to 204,000 in the holiday shortened week.
Treasury Secretary Steve Mnuchin said that the US is “seriously considering” issuing a 50 year bond. “We would do this in a way that if there is demand it’s something that we would meet. I personally think it would be a good thing to expand the U.S.′ borrowing capabilities,” Mnuchin said. “I would say it’s obviously quite attractive for us to extend and derisk the U.S. Treasury borrowing. So we’re also looking at extending the weighted average maturity of the Treasury borrowing to derisk this for the U.S. people.” Mnuchin also pushed back against Trump’s view that we need negative interest rates in the US, as negative interest rates wreak havoc on bank earnings, and a weak banking sector does not make a foundation for a strong economy.
Separately, Mnuchin said that the Trump Administration has approved the plan to reorganize the GSEs. “We are actively negotiating an amendment try to get it done by the end of the month” What “actively negotiating an amendment” means is unclear, but it probably refers to the net worth sweep of Fannie and Freddie’s profits to Treasury. Since that was done via executive order during the Obama administration, it should be able to be undone the same way. Full legislation is probably going to be impossible heading into an election year, judging by the way testimony went in the Senate.
Filed under: Economy, Morning Report |
All Things in Moderation 
Interesting piece on democrats attempt to astro-turf talk radio
https://freebeacon.com/politics/dems-secretly-fielded-thousands-of-activists-to-manipulate-media-clinton-library-docs-show/
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We visited the Clinton Library in Little Rock the morning of the day that we were hit from behind by the crane [7/30/19].
Day by day through eight years with great exhibits. BTW, neither Monica Lewinsky nor the Impeachment ever happened.
All days were covered and that just never happened. Trust me.
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That doesn’t surprise me. Maybe one day far in the future they’ll cover that part. Would have been gutsy to have a Lewinski exhibit though.
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Rush used to call out seminar callers all the time. I don’t think it was helpful. Also if this were coming out about the Bush admin, the media response and coverage would be very different, I think.
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It’s weird that Illinois is losing population and their politicians keep going to jail.
Obama was clean though, Tony Rezko was a weird coincidence.
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