Press Clips

Unpacking the June jobs report by Sabri Ben-Achour The U.S. economy added 206,000 jobs in June, according to the labor department.   On the other hand, the job growth in previous months was revised down significantly. Let’s discuss with Karen Petrou, co-founder and managing partner at Federal Financial Analytics. https://www.marketplace.org/shows/marketplace-morning-report/more-signs-of-a-cooling-labor-market/#Unpacking-the-June-jobs-report

Why are bond prices up right now? And what difference does it make? By Mitchel Hartman We’re in the midst of a bond market rally. In the last eight weeks — barring Monday, when the bond market retreated a bit — bond prices have been going up, as their yields — the annual interest rate they pay — have been going down....The Fed’s got interest-rate-setting meetings in July and September. But here’s the thing: It met just last week: At that meeting, “they changed their forecast,” said Joanna Gallegos. “They said for the end of the year, we anticipate only making one rate cut versus three.” Basically, said Karen Petrou, a managing partner at Federal Financial Analytics, the bond market is saying to the Fed: “We can hear you. We’re just not listening.” “Even though [Chair] Jay Powell said, ‘We’re going to keep rates about where they are for a [...]

Will Democrats stand by Gruenberg? By Clair Williams Lawmakers — mostly Republicans — let loose almost immediately after the release of an independent review of the Federal Deposit Insurance Corp.'s workplace culture, calling for the agency's chairman, Martin Gruenberg, to resign. Those calls, while neither entirely new nor unexpected, were being made by lawmakers farther afield from the usual suspects on the House Financial Services Committee and Senate Banking Committee who are typically involved in financial policy issues....Those hearings could be critical to Gruenberg's survival at the agency. So far, both the White House and his Democratic allies on Capitol Hill haven't asked for his resignation, but that could change in the time between the release of the review and his testimony. Lawmakers are receiving closed-door briefings today on the results of the review, according to multiple committee sources familiar with the matter, which could affect lawmakers' views. I think [...]

Is the Fed board eroding regional Fed banks' independence? By  Kyle Campbell  The Federal Reserve Board of Governors has a greater say over leadership at the reserve banks than it once did. But whether that benefits the central banking system is an open debate...Karen Petrou, managing partner of Federal Financial Analytics, understands the Board's involvement in presidential approvals to be largely consistent with its historical approach. The only meaningful change, she said, is the Board's insistence that it review candidate pools to ensure they are "broad and diverse." The Board has outlined its policy around its reserve bank presidential search involvement on a frequently asked questions page on its website. According to archived versions of the site, the page has been live and has highlighted the focus on "broad and diverse" candidate pools since at least December 2014. Because the Fed has taken a stance that fostering diversity, equity and [...]

What do bank earnings tell us about the economy? By Mitchell Hartman It’s the second week of April, which means spring is in the air and daffodils, cherry trees and lilacs are blooming. Here at Marketplace, it also means earnings season is starting. Corporate profit-and-loss reports for the January-to-March quarter kicked off in earnest Wednesday with Delta Air Lines, which did quite well. Revenue rose 6% and earnings per share nearly doubled from a year ago. ..“Banks really are bellwethers of the economy,” said Karen Petrou, managing partner at Federal Financial Analytics. “Biggest issues for the larger banks: interest rates, which we — at least, I — know are going to be higher for longer. And that helps to improve bank earnings.” That’s because the banks make more money on the interest they charge borrowers. But Petrou said there’s also a downside to interest rates staying high: credit losses. As consumers [...]

When is strong hiring too strong? by David Brancaccio Hiring in the month that just ended was quite a bit stronger than expected, with more than 300,000 jobs added to payrolls and the unemployment rate falling slightly to 3.8%. That’s continuing the Fed’s interest rate predicament. We’ll discuss with Karen Petrou, co-founder and managing partner at Federal Financial Analytics. https://www.marketplace.org/shows/marketplace-morning-report/a-lot-of-businesses-want-to-use-ai-to-cut-staff/#When-is-strong-hiring-too-strong?

Buy the People: Why everyone loves to hate the Fed By Kyle Campbell Click the link below to listen to Kyle Campbell's podcast on economic  populism.  It’s a terrific survey of Fed history with authoritative insiders including Federal Financial Analytics' managing partner Karen Petrou, and then – my bit – an assessment of why recent monetary  policy has made so many Americans so angry and how that affects the political outlook , especially this November. https://www.americanbanker.com/podcast/buy-the-people-why-everyone-loves-to-hate-the-fed

By MICHAEL STRATFORD and ZACHARY WARMBRODT First look: A bank merger rethink — MM has a preview of a provocative bank M&A talk that Federal Financial Analytics managing director Karen Petrou will give at a Kansas City Fed workshop today. As banking agencies signal tougher scrutiny of proposed mergers, Petrou makes the case that regulators are failing to use tools they already have to address conflicts of interest, concentration and unfair competition ahead of M&A reviews. “How much of this is necessary in merger review and how much could be accomplished by better prudential regulation along with vigilant supervision and meaningful enforcement?” she says in remarks prepared for her talk, which you can read here. https://www.politico.com/newsletters/morning-money

Why Is Trump’s Truth Social Worth Billions? Experts Have Theories By Eric Cortellessa On the cusp of a financial crisis, Donald Trump got help from an unlikely source: His struggling social media platform. Investors approved a plan on Friday to take Truth Social public, increasing his net worth by billions as he’s drowning in legal expenses and owes New York state half a billion dollars in a civil fraud case. The company will start trading on the ​​Nasdaq exchange on Tuesday. But the financial statements of Trump’s firm show scant evidence of a booming business worthy of the $4.7 to $5.6 billion market capitalization reported on Monday. Trump Media & Technology Group, which owns Truth Social, lost money last year, according to regulatory filings....It’s not the first time that markets have embraced social media companies at levels that appear to exceed their value, according to Karen Petrou, managing partner of [...]