Summer Comes to an Uncertain Close

Summer break is all but washed away.  At our house the boys head back to school on Monday, which means that I need to try to remember how to set an alarm clock again.

Aside from Great Britain leaving the European Union a few months ago, the economic news has been really light.  The lack of coverage might have something to do with the political productions playing out on stages large and small across the country.  It’s reality TV that is actual reality, on TV.

Three Fed Governors spoke at various functions this week, and their message is all but congruous. San Francisco Fed President Williams said that the central bank should raise rates sooner rather than later.  Dallas Fed President Kaplan said that because of the domestic economy’s sluggish momentum, the Fed really has no room to hike rates.  St. Louis Fed President Bullard said that he can only see a single rate hike coming in the next two years.

Uncertainty typically breeds an environment in which interest rates remain low, as investors push their money into a vehicle offering a guaranteed return and the safe haven of capital preservation–bonds.