Category: Financial Services

The Fed’s Digital Dollar Will Remake The Capital Markets

The Fed’s Digital Dollar Will Remake The Capital Markets

From instant trade settlement, to real-time AML transparency and reporting, the Fed's CBDC / "Digital Dollar" will drive efficiency, enhance transparency and reduce privacy. "We are the Federal Reserve and we are here to help" (translation: run for cover). The Federal Reserve will have rolled out its CBDC - the Digital Dollar - by 2025 … Continue reading The Fed’s Digital Dollar Will Remake The Capital Markets

How The CPI’s Fuzzy Math Understates Inflation

How The CPI’s Fuzzy Math Understates Inflation

The CPI data category "Owners' Equivalent Rent" ("OER"), uses data derived from surveys of homeowners in select markets rather than real world data. This technique allows the BLS and the Federal Reserve to understate price inflation. OER understates CPI by 1% or more. September's 5.4% CPI increase was understated by at least 1% per our … Continue reading How The CPI’s Fuzzy Math Understates Inflation

Insurance M&A Will Drive InsurTech M&A

Insurance M&A Will Drive InsurTech M&A

We expect that Claims Processing technology providers will merge with one another (P&C with Health & Life) as well as with Policy Administration technology providers to better serve insurance company customers as insurance M&A continues its rapid pace (See the Chubb / Cigna A&H deal HERE). One hypothetical M&A example would be Solera (P&C) merging … Continue reading Insurance M&A Will Drive InsurTech M&A

More Than Tiny Bubbles: Policy-Driven Market Distortions

More Than Tiny Bubbles: Policy-Driven Market Distortions

We highlight some of the bubbles (some call it the "Everything Bubble"), caused by the ultra-loose fiscal and monetary policies that have distorted markets since April 2020. The longer Powell & Company wait to taper and eventually raise interest rates, the more difficult it will be to reel in the price inflation caused by the … Continue reading More Than Tiny Bubbles: Policy-Driven Market Distortions

Real GDP Growth Will Not Rebound In 2022

Real GDP Growth Will Not Rebound In 2022

Economists pushing the narrative that Real GDP growth will climb back to mid-single-digit percentages in 2022 have got it wrong. The combination of persistent price inflation and weak labor participation will ensure that Real GDP remains range bound between zero and 2%. The sooner Wall Street pundits learn to say "Stagflation" the more honest conversation … Continue reading Real GDP Growth Will Not Rebound In 2022

Leveraging Alternative Assets To Increase Yield

Leveraging Alternative Assets To Increase Yield

Insurance company CIOs continue to use Alternative Assets to increase yield in this ultra-low interest rate environment. KKR Asset Management's Insurance CIO survey found similar results (chart below) to our recent TEK2day Spotlight report on the insurance industry which may be accessed HERE. We expect that the heavy use of Alternative Assets in the pursuit … Continue reading Leveraging Alternative Assets To Increase Yield

Powell Acknowledges Inflation Could Persist Longer Than Anticipated

Powell Acknowledges Inflation Could Persist Longer Than Anticipated

Fed Chair Powell's statement to be made Tuesday at 10:00am ET to the Committee on Banking, Housing, and Urban Affairs acknowledges that inflation may not be as "transitory" as the Fed initially thought. Powell's statement to the committee is below. Powell knew this would be the case months ago but the Fed will never admit … Continue reading Powell Acknowledges Inflation Could Persist Longer Than Anticipated

The Second Domino Falls As Kaplan Steps Down From His Dallas Fed Post

The Second Domino Falls As Kaplan Steps Down From His Dallas Fed Post

Earlier today Boston Fed President Eric Rosengren announced his September 30th retirement. This afternoon Dallas Fed President Robert Kaplan announced he will step down effective October 8th. We first wrote about the Fed's poor governance earlier this month. Chair Jay Powell's resignation would be the icing on the cake but that news is not forthcoming. … Continue reading The Second Domino Falls As Kaplan Steps Down From His Dallas Fed Post

Real GDP Growth Remains Muted

Real GDP Growth Remains Muted

The Atlanta Fed updated its model for Real GDP ("GDPNow"). The Atlanta Fed's 3.2% Real GDP estimate as of today is down from 3.7% as of September 21st. We have previously written that real GDP growth may very well be zero percent or even negative as we believe the Federal Reserve underestimates true price inflation … Continue reading Real GDP Growth Remains Muted

Boston Fed President Eric Rosengren Announces He Will Retire Sept. 30

Boston Fed President Eric Rosengren Announces He Will Retire Sept. 30

We recently wrote that it was outrageous for Fed officials to have traded equities as the Fed was doing deals with corporate issuers in 2020. One of the offenders - Boston Fed President Eric Rosengren - has been dealt with. The other direct offender was Dallas Fed President Robert Steven Kaplan. Frankly, Chairman Powell ought … Continue reading Boston Fed President Eric Rosengren Announces He Will Retire Sept. 30