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Former Fed Chair Yellen warns the Fed can’t do much in the event of a down turn

Federal Reserve Chair Janet Yellen spoke at a business forum on Thursday

Via CNBC, some key points she made:
  • U.S. economy is in “excellent” shape but facing several risks.
  • wealth disparities are “extremely disruptive”
  • In a downturn, the Fed would have little room to move, due to low rates.
  • tariffs the U.S. has on Chinese imports aren’t doing any good
Here is the link for more
While Yellen no longer has an input into US monetary policy her views are well worth considering.
Federal Reserve Chair Janet Yellen spoke at a business forum on Thursday

Hu Xijin: US can’t decide when and how to end trade war

Comments from the Global Times editor

Tweet from Hu Xijin, who is often viewed as a mouthpiece for Beijing:
The US has the upper hand in US-China trade war, which allows it to decide when to end the trade war, but far from enough for it to decide how to end the trade war. The US side wants both, then it needs to change an adversary.
The language is a bit broken but he’s saying the US is pushing too hard but also says the US has the upper-hand, which is a bit conciliatory and constructive.

Base-case still for Fed to stay on hold in December and through 2020 – Citi

Citi on the Fed outlook

Citi discusses the Fed policy trajectory in light of yesterday’s FOMC minutes from the October meeting.

“Minutes from the October 30th FOMC released overnight are broadly consistent with Citi analysts expectations for disagreement regarding the need to cut, but agreement that on leaving policy rates on-hold. On USD supply to year end (the more interesting part of the Minutes), Fed officials continue to look for ways to make sure funding pressures in the overnight lending market don’t cause a problem again with a “standing repo” seen as the preferred option that would likely provide substantial assurance of control over the federal funds rate (and USD supply). However, Citi analysts do not expect a final decision until H1 2020. ,” Citi notes.

The Citi analyst view remains for the Fed to stay on hold in December and through 2020 though muted inflation makes hikes in the next year very unlikely. Cuts are possible should domestic activity data indicate a slowdown,” Citi adds.

Crude oil trades at the highest level in nearly 2 months

Highest level since September 24

The price of crude oil futures has moved up to a new session high at $58.28 and in the process is trading at the highest level since September 24 nearly 2 months ago.

Highest level since September 24_

The move today took the price above its November high at $58.09. Recall that the price of crude oil traded above and below its 200 day moving average at $57.39 for 11 consecutive days.
On Tuesday, the price tumbled lower falling below its 100 day moving average (and closing below that level).   The move lower was helped by a much higher than expected API oil inventory data.
However yesterday, the inventory data from the DOE showed not nearly as strong a build, and the squeeze higher was on.
The price action today tried to stay below the 200 day moving average earlier in the session, but that level gave way, leading to increase momentum to the upside.  Bullish.
Should momentum continue (stay above the 200 day MA), the 61.8% retracement of the move down from the September high comes in at $58.65. Get above that level and there is more room for further upside with the natural resistance level at $60 looming as a target to the upside.
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