|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||48.89 - 48.92|
|52 Week Range||48.52 - 49.66|
|PE Ratio (TTM)||N/A|
|Expense Ratio (net)||0.06%|
The Bureau of Labor Statistics (or BLS) released the “Job Openings and Labor Turnover Survey” (or JOLTS) data for February on April 13. The data for this survey is collected by a monthly survey on job openings, the number of new employees hired, the number of employees who have quit, the number of employees asked to leave, and other job separations. The JOLTS report is an indication of the demand for workers in the United States.
The most recent inflation (VTIP) report indicated that core inflation moved closer to the Fed’s 2% target, which could translate into further rate hikes from the central bank. At its recent meeting, the Fed clearly stated that it would continue tightening if supported by economic data. If interest rates and inflation (SCHP) start rising, bond (BND) yields could rise in response and bond prices could fall. US bond yields were largely unaffected by the inflation report favoring higher rates.
On April 11, market participants expected a volatile session after the US inflation report, but, to their surprise, Donald Trump’s tweet earlier in the day about Syria and missiles pushed markets lower. Had there not been any geopolitical tensions, the market reaction could have been negative despite the lower headline number. A faster pace of rate hikes from the Fed may have contributed to the market performance that day. The Fed has been increasing interest (SCHP) rates at a slower pace in the last two years despite employment picking up, citing low inflation as the reason for its slower pace.
The US Bureau of Labor Statistics has reported that US consumer prices fell 0.1% in March. The labor department reported that the consumer price index fell 0.1% in March after rising 0.2% in February. Though the headline inflation (TIP) was lower than expected, core inflation (VTIP), which excludes volatile food and energy prices, rose 0.2% in March, marking a YoY (year-over-year) increase of 2.1%, above the Fed’s 2% target. This increase in core inflation, following strong growth by the producer price index in March, could translate to higher inflation in the coming months.
The March FOMC meeting minutes indicated that the staff and FOMC members turned bullish on inflation. According to the minutes, all of the FOMC members expected the 12-month inflation (TIP) to increase in the coming months. The FOMC staff review indicated that PCE (personal consumption expenditures) inflation remained below the 2% target.
In FOMC meeting minutes, a staff review of the economic situation is presented to the FOMC members. In the March meeting minutes, the FOMC staff review of the economy was stronger than the review presented at the January meeting. The short-term real GDP growth expectation was revised lower due to softness in recent economic data. The medium and long-term projections for economic growth were revised higher due to the expected positive impact of the recent federal budget and tax cuts. US unemployment is expected to remain below the longer-run natural rate. ...
Personal consumption expenditure (or PCE), as defined by the Bureau of Economic Analysis (or BEA), is the value of goods and services purchased by, or on the behalf of, people who reside in the United States. PCE inflation (CPI) is the preferred tool of the US Fed when assessing the price levels in the economy, as it reflects the actual increase in prices for consumers. Increasing inflation (VTIP) could give the US Fed enough confidence to continue to increase the Fed funds rate.
During his keynote at the tenth conference organized by the International Research Forum on Monetary Policy in March 2018, Boston Federal Reserve president Eric Rosengren said that the United States has been lagging behind some European economies (VGK), which are building excess fiscal policy buffers by following austerity measures. Recently, the Trump administration has announced tax cuts for businesses and individuals and proposed increased spending, adding to the fiscal deficit. Total US debt has now surpassed $21 trillion and it is expected to increase further as the government deficit is likely to balloon in the months ahead.
The FOMC (Federal Open Market Committee), as part of its statutory mandate, seeks to foster maximum employment and stable prices (TIP). The efforts of the Fed with its accommodative monetary policy and excessive money printing helped bring back unemployment below the target rate of 4.5%. Over the last 12 months, unemployment levels have fallen to a 17-year low of 4.1%.
The FOMC’s (Federal Open Market Committee) March statement was released on Wednesday, March 21, 2018, and the outlook for the closely watched inflation remained muted. The statement indicated that on a 12-month basis, both inflation (CPI) and core inflation (which excludes food and energy) have continued to be below the 2% target rate. The summary of economic projections released along with the FOMC statement indicated minimal changes to the inflation growth outlook.
In its March FOMC (Federal Open Market Committee) meeting, the Fed increased the Federal funds rate by 25 basis points and released the upgraded economic projections through the Summary of Economic Projections (or SEP) report. The report is released by the FOMC and contains the members’ projections for GDP growth, inflation (TIP), unemployment, and the policy interest rate.
In the first policy meeting under new Fed chair Jerome Powell, the FOMC (Federal Open Market Committee) increased the interest rate by 0.25%. It increased the target range of the federal funds rate to 1.5%–1.75%, leaving the monetary policy stance accommodative in its effort to support a strong labor market and for inflation (TIP) to reach a sustained level of 2%. The decision to increase the US interest rate was unanimous with an 8–0 vote.
The Bureau of Labor Statistics released its JOLTS (Job Openings and Labor Turnover Survey) data for January on March 16. According to the report, the total number of job openings on the last day of January was 6.3 million, an impressive increase from the 5.6 million job openings seen in December, and the highest reading since the beginning of the survey in 2000. JOLTS data is collected through a monthly survey of job openings, number of new employees hired, number of employees who have quit or have been asked to leave, and other job separations.
The US Bureau of Labor Statistics reported on Tuesday that consumer prices in the US grew by 0.2% in February after a stellar increase of 0.5% in January. The US dollar (UUP) declined after this report, as a lower rate of inflation could limit the pace of rate hikes from the US Fed. For developed economies, higher interest rates could lead to a higher valued currency. The US dollar (UDN) managed a minor recovery after the initial slump after the inflation (VTIP) report, but the recovery was short-lived as news about President Trump firing the US Secretary of State, Rex Tillerson, hit the wires.
This inflation report added to the risk appetite that was revived after the tariff flexibility and tepid hourly earnings growth reported in the previous week. Both the payrolls report on Friday and Tuesday’s inflation (TIP) report have increased the odds for a slower pace of rate hikes from the US Fed. In the last five weeks, markets were concerned that faster rate hikes could have an impact on the performance of businesses whose borrowing costs could increase if the Federal rates go up. The inflation report was released before the market opened, and the initial reaction was recorded in the index futures.
The US Bureau of Labor Statistics reported that US consumer prices increased marginally in February. The year-over-year increase in core inflation (TIP) was reported at 1.8%, unchanged from the January reading. The inflation (VTIP) reading for February was largely in line with expectations, which is easing investor fears about interest rates rising too quickly and impacting the growth rate of equity investments and depressing the value of bonds (BND).
Is the Lower GDP Estimate for 4Q17 a Sign of Slowdown? The US Bureau of Economic Analysis (or BEA) has released its second 4Q17 GDP estimate, projecting that the US economy increased at an annual rate of 2.5%. This second estimate is lower than the previous estimate of 2.6% from last month and the 3.2% growth seen in 3Q17.
Bond markets across the developed world have enjoyed a three-decade bull run that began in the early 1980s. The increasing demand for fixed income (BND) investments has pushed bond prices higher and yields lower, but investors have continued to pour money into bond markets because bonds were known to help balance portfolio risk. Now, with global economies picking up the pace, interest rates are bound to increase—at least, in the short-term—until they reach normal levels.
The January FOMC meeting minutes indicated that the staff and the members turned bullish on inflation. The confidence of the members about inflation reaching the 2% target over the medium term was evident with the minutes stating that the staff expects core inflation (TIP) growth could be notably faster in 2018. The minutes indicated that almost all the members were of the view that inflation could move up to 2% over the medium term with no major risks to that outlook.
In the FOMC meeting minutes, a staff review of the economic situation is presented to the members of the committee. The January meeting minutes’ FOMC staff review indicated that the real US GDP expanded 2.5% in the fourth quarter, and increased spending by households and businesses indicated that the economic momentum remained solid. As per the FOMC staff report, inflation (TIP) in the US remained below the 2% target.
The last Federal Open Market Committee (or FOMC) meeting was on January 30 and January 31. At this meeting, the target range for the Federal Funds target rate was left unchanged at 1.3% to 1.5%. This decision by the members was made after assessing current economic conditions and the outlook for economic activity.
The CPI (consumer price index) measures the changes in prices at a consumer level. The CPI is the weighted average price of a basket of goods and services at the consumer level. The CPI includes food, medical care (XLV), transportation, housing, apparel, recreation, education and communication, and other goods.
In the FOMC’s January statement, the committee said that information received since the last meeting indicated that the US economic activity has been increasing at a solid pace. Also, the labor market has continued to strengthen. The economic outlook remained positive—taking the gains in employment, household spending, and business (VOO) investment into account.