The Federal Reserve Bank Raised Its Benchmark Short Term Interest Rate for the First Time in 2016
The Fed expects to lift the short term interest rate faster than previously projected in the coming year. Why? Because they thought Hillary would win and our economy would continue to slog along.
However, the Trump administration has destroyed that bullshit. With the knowledge that REAL growth will return to the US economy the Fed can do the proper thing and create the tools necessary (higher rates) so that they have room to help the economy in the next correction.
Fed officials said they would nudge up the federal funds rate by a quarter percentage point on Thursday. They also said (as I mentioned above) they see a brightening economic outlook and expect to raise the short term interest rate next year by another 0.75 percentage point-likely in three quarter point moves.
And the Trump Train keeps on rolling…Make America Great Again!
US Raw Steel Production Rose Last Week
US raw steel production rose 2.4 percent last week as mills operated at an ACUR of 70.6 percent. In the corresponding week last year mills operated at an ACUR of 62.1 percent. On the year, mills have produced prox 83,000,000 tons compared to prox 84,000,000 tons produced in the like period last year.
Empire State Manufacturing Activity Grew in December 2016
The Federal Reserve Bank of New York released its December 2016 Empire State Manufacturing Survey and reported business activity grew modestly. General business conditions climbed, the New Orders Index rose and the Shipments index was unchanged.
Philadelphia Manufacturing Activity Also Picked Up in December 2016
The Federal Reserve Bank of Philadelphia also released its December 2016 Manufacturing Business Outlook Survey and reported activity picked up according to firms responding to the survey. The indexes for general activity, shipments and employment were all positive. All increased from November’s readings.
Optima Specialty Steel, Inc. Filed for Chapter 11 bankruptcy protection on December 15.
Miami based Optima owns a portfolio of steel manufacturers including: Niagara-LaSalle Corp, Michigan Seamless Tube, Corey Steel and Kentucky Electric Steel.
Bankruptcies are less of a “big deal” as they’d been in the past, partly because steel companies can often operate and serve customers even during bankruptcy proceedings. But the story will not end here as the general rules of Chapter 11 may force them to sell some of their assets in order to pay cash up front to their vendors which would obviously put Optima’s companies under a severe amount of pressure. It is not yet known what strategy Optima will pursue.
That’s it for me kids…I will be back in the saddle next week, completely recharged and ready to go. I had a great vacation as is typical here in Cabo, the land of “no bad days” My buddy and I fished again yesterday and each of us caught a nice Striped Marlin, both released to fight again.
Have a great weekend as you enjoy your preparations for the Christmas and Hannukah holiday seasons.
God bless the United States of America!