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.

Skating Away Time

Historically, June 21st is my favorite day of the year.  Not just because today is the ninth annual International Skateboarding day, but because usually it’s the day with the most daylight out of the 364 other days.  This year, yesterday had the most daylight.  If you want evidence that time is speeding up, that’s one more proof.  Riding a skateboard may help you keep up.

Fed Chair Janet Yellen spoke to the Senate Banking Committee this morning, lauding the improving economy in spite of the slowing labor market.  While she noted that indicators point to a stronger GDP for the 2nd quarter (ending in nine days), there is a cautious tone overall, with inflation well short of the Fed’s 2.0% goal.

The likelihood that the U.K. will exit the E.U. is slimming, buoying up the price of U.S. stocks and holding down bond prices.  But so far, mortgage rates are holding their ground.