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Week In Review


September consumer prices were unchanged.  Year-over-year, the CPI has risen 2.4%.  Producer prices unexpectedly fell 0.3% in September and are up just 1.4% over the past year.

Our Take

Inflation remains subdued, which shouldn’t come as too much of a surprise given the worldwide economic slowdown.  Should the Fed want to continue to cut rates, this month’s inflation readings will not stop them.


An Iranian tanker was struck by two missiles while traveling in the Red Sea off of the coast of Saudi Arabia.  Crude prices rose modestly on the news, though not by nearly as much as they rose following last month’s drone attack on a Saudi crude processing facility.

Our Take

This attack serves as a reminder of the elevated tensions in the gulf region and the potential for those tensions to disrupt a critical part of global crude supplies.  A crude oil price shock due to supply disruptions or concerns about such disruptions would be a headwind for global growth at a time when that growth is already slowing in the face of trade tensions.

FOMC Minutes

This week the Fed released the minutes from the September FOMC meeting.  The minutes show that members were more worried about the economy since the meeting in July.  Although the US economy is rising at a moderate pace, trade tensions and the global slowdown have weighed on the business sector and capital investments.  Those risks have increased since the July meeting, according to the minutes.  Most policymakers supported the need for the rate cut in September, but the committee remains divided on the path ahead.

Our Take

The Fed continues to hold a positive view on the economy, but recognizes there are potential headwinds stemming from international uncertainties.  Although the path forward is not clear, the Fed’s tone was more dovish than the post-meeting statement in September suggested.  Additional accommodation later in the year remains a possibility.


Paperwork filed prior to a California new municipal issuance indicated that state and federal officials will meet in January to discuss high speed rail funding.  In May the Federal Railroad Administration announced that a $929 million grant would be cancelled.  California sued, challenging the decision to cancel.  Officials hope that the January settlement conference will lead to a compromise.

Our Take

California had scaled back the rail project, citing cost overruns, but had vowed to complete the portion of the project that was already under construction.  A resolution and possible compromise is good news for California taxpayers.

All expressions of opinions are subject to change without notice in reaction to shifting market conditions.  All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness.  Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice.