The US S&P 500 closed roughly where it started the day after having fallen early in the trading session, while yields on safe haven debt rebounded somewhat from Friday’s lows. European markets were mixed. (Financial Times) Read more
It was inevitable that the abysmal payrolls report last Friday would make louder the calls for another round of quantitative easing from the FOMC, which meets later this month.
QE can take various shapes, but we wanted to mention something about the specific idea of the Fed buying up more US Treasuries: as a few analysts have pointed out recently, there’s a pretty good chance that rates will stay low no matter what the Fed does. Read more
A US GDP factoid that we missed last week, spotted by the econ team at Credit Suisse:
We would note that the profit share of GDP in the first quarter, reported in [last Thursday’s] GDP revision, shrunk for the first time in the current business recovery/expansion. Without much stronger nominal GDP growth, and with the low hanging fruit of lower interest rates and debt service costs already having been harvested, restoration of margins is achieved mainly through reducing labor costs. This factor may prove more enduring for the employment data.