ECONOMY - APRIL 2019

There still seems to be confusing information on the economy.  Bryan Moynihan says that the economy is in good shape ("More people are working now than ever, the unemployment claims are low, wages are growing fast...It's a good place, right now," Moynihan told CNBC's Wilfred Frost in an interview).*  This evaluation is in response to the Secretary of the President's Economic Advisor Larry Kudlow  who is panicky and says the Fed needs to cut rates immediately and by a half of a percent rather than a quarter of a percent. ** I'm gradually beginning to get a hang for what is going on.

One analyst has pointed out that President Trump has quite a few loans that are variable/adjustable rate, so any increase in the interest rates costs him a lot of money.***  But at a rate by the Fed of 2.25-2.5%, my view is that rates are incredibly low historically. (https://www.jpmorganchase.com/corporate/About-JPMC/historical-prime-rate.htm)

Bryan Moynihan is not all the good news, however.  The Walmart CEO says that the consumer is in pretty good shape.*  Also manufacturing good and construction spending up*

But these are not the whole story.  There are others who feel that the next move by the Fed is to cut rates.****  And while there are plenty of jobs, there is also a problem of fitting job seekers to a job.****  Also the yield ion the 2 yr Treasury has been higher than the 5 yr, which is unsettling because an inverted yield curve (short term rates high than longer term rates often signals a recession.  We do not have a whole inversion yet, so there are those who feel that a recession if premature.****

My conclusion is that , for now, it is full steam ahead on the economy.

* https://www.cnbc.com/2019/04/02/bank-of-america-ceo-brian-moynihan-says-us-economy-is-strong.html
https://www.cnbc.com/2019/04/04/walmart-ceo-the-american-consumer-is-in-pretty-good-shape-right-now.html
https://www.cnbc.com/2019/04/01/ism-.html

** https://www.cnbc.com/2019/03/29/white-house-advisor-kudlow-says-fed-should-cut-rates-report.html

*** https://www.marketwatch.com/story/trump-still-owes-lenders-including-deutsche-bank-as-much-as-480-million-2018-05-16
https://www.msn.com/en-us/money/companies/deutsche-bank-weighed-extending-trump-loans-on-default-risk/ar-BBTQkDA
****https://www.cnbc.com/2019/04/01/the-biggest-question-for-the-market-entering-the-second-quarter-recession-or-just-a-soft-patch.html
https://www.wsj.com/articles/dallas-fed-president-too-soon-for-fed-to-consider-cutting-rates-11553679121
https://qz.com/1583024/us-gdp-growth-weaker-than-originally-thought-as-sugar-high-wears-off/
https://www.cnbc.com/2019/04/05/americas-bustling-jobs-market-is-still-leaving-some-people-behind.html
https://www.jpmorganchase.com/corporate/About-JPMC/historical-prime-rate.htm
https://www.cnbc.com/2019/03/21/a-key-recession-indicator-just-did-something-that-hasnt-happened-in-12-years.html