Daily Archives: June 23, 2021

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Since 2011, the Federal Reserve has published a chart known as the dot plot, which maps out policymakers expectations for where interest rates could be headed in the future.

The dot plot serves as a guide for financial markets, which tend to dislike policy surprises from the nations central bank.

But the dot plot also runs the risk of sending the wrong message, since forecasts are often wrong.

Four times a year (March, June, September, and December), the policy-setting Federal Open Market Committee (FOMC) publishes a Summary of Economic Projections (SEP).

The SEP includes forecasts for where key economic indicators like GDP, inflation, and unemployment will be in coming years.

The release also includes the dot plot, which map out each members projections for where interest rates will be in up to three years (and over the longer-run).

The dots are not labeled with the person who submitted the forecast, leaving it up to Fed watchers to speculate who made what projection.

The FOMC does not coordinate the distribution of the dots. Members of the FOMC can bring up their forecasts in meetings, but the committee does not jointly describe the shape of the dot plot.

An example (from June 2021) of a print of a "dot plot" from the Federal Reserve's Summary of Economic Projections. Source: Federal Reserve

Fed watchers like to look at the median forecasts in the Summary of Economic Projections, which the central bank provides for the numerical prints on inflation, unemployment, and GDP.

In the dot plot, the median dots tend to get the most attention, since they represent the most central possible path for policy.

One challenge with looking at the median dot is that it is unclear if a median dot in one given year was submitted by the same Fed official as the median dot in another given year.

By extension, it is also difficult to discern if the median forecasts for inflation, unemployment, or GDP are tied to those median dots.

This means that the central forecasts provided in the SEP could be representative of no one on the committee.

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In the aftermath of the 2008 financial crisis, the Federal Reserve slashed interest rates to near zero and bought trillions of dollars in U.S. Treasuries and agency mortgage-backed securities.

The unprecedented degree of monetary stimulus had markets in the dark about when the Fed would ever raise interest rates again. As a tool to offer more forward guidance to markets on its next moves, then-Fed Chairman Ben Bernanke and soon-to-be Fed Chair Janet Yellen invented the dot plot.

As an invention of 2011, the dot plot has not been around all that long. But the post-crisis episode gives one test for how the dots were able to communicate liftoff from near-zero rates.

A chart from Hanlon Research maps out median projections from dot plots of years' past, showing a spotty record on predicting the timing of the the Fed's post-crisis liftoff. Source: Hanlon Research, Federal Reserve

Projections published in 2013 and 2014 forecast interest rates rising much faster than the Fed ended up pacing at.

Even after the Fed kicked off its first rate hike in December 2015, forecasts remained unreliable. Projections from the December 2015 meeting showed the median Fed official expecting four rate hikes in 2016.

There would be only one rate hike that year, in December.

The dot plot got better at forecasting rate moves once the Fed steadied its hiking cycle, but the U.S.-China trade war and the COVID-19 crisis again backed the Fed to near-zero rates.

With the dot plots shaky record on predicting liftoff, Fed Chairman Jerome Powell is again de-emphasizing the predictive power of the dot plot.

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Chris Noths return to the role of Mr. Big in the Sex and and the City revival almost didnt happen. The actor tells Yahoo Finance Live that at first, he was "hesitant" about reprising his role as Carrie Bradshaw's on-again, off-again main squeeze in the Emmy-winning HBO comedy-drama that originally ran from 1998-2004.

It was a little bit of a sort of creative negotiation because I didn't really feel I had anything to offer in that role again. It kind of felt like I had done it, he said. But [executive producer] Michael Patrick King is just an incredible writer and has incredible creative ideas, and once we got together and talked about the potential of what we could do with the character, I was all in.

Production on the sequel series called "And Just Like That..." is already underway in New York City, and most of the original cast is returning for the 10-episode revival that will stream on HBO Max. Sarah Jessica Parker, Cynthia Nixon and Kristin Davis will all reprise their roles as besties Carrie Bradshaw, Miranda Hobbes and Charlotte York Goldenblatt, respectively. Notably absent will be scene stealer Kim Catrall as Samantha Jones, who declined to join the reboot.

From left to right, Cyntha Nixon as Miranda Hobbes, Sarah Jessica Parker as Carrie Bradshaw and Kristin Davis as Charlotte York Goldenblatt in a scene from the HBO hit comedy, "Sex and the City."

Noth's character married Carrie in the first "Sex and the City" movie, but their marriage may be in for some challenges in the sequel, since Carries ex-love, Aidan Shaw (played by John Corbett), is reportedly set to appear in multiple episodes.

While riding his bike in Manhattan, Noth said he passed film trucks on Third Avenue and, "I was like, yeah, that's great ... the city's back."

"We filmed 'The Equalizer' toward the end of the pandemic and we had very strict rules and it worked out. You know, mask wearing and testing every day," Noth said. "It really probably cost the studios and networks a lot of money to do that. And I think that now things are getting back to normal. And I look forward to it."

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Noth, a Yale School of Drama alumni, said "Broadway is the backbone of tourism in New York. And it's sort of how the Big Apple identifies itself in many ways. So I can't state how important that is. And I'm sure most New Yorkers will agree."

"We really are waiting with bated breath to get back in the theater and find a way to see the shows again," he said. "It's been very, very hard on people in the unions and the costume and the set directors and actors and musicians. It's been very, very difficult for them."

Alexis Christoforous is an anchor at Yahoo Finance. Follow her on Twitter@AlexisTVNews.

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Chris Noth was 'hesitant' to reprise his role in 'Sex and the City' sequel - Yahoo Finance

Cryptocurrencies suffered another brutal weekend with bitcoin (BTC-USD) approaching $30,000 and ethereum (ETH-USD) sliding under $2,000 after China toughened its stance on crypto payments. But Coinbase customers now have access to an ethereum competitor called Polkadot (DOT1-USD), which is gaining the attention of Wall Street.

At a recent Yahoo Finance Plus webinar, Capital2Markets President Keith Bliss compared the two developer networks, which are designed to decentralized finance. "Polkadot is an ethereum competitor and a lot of programmers are now using that blockchain to build applications off of, because they consider it a little bit safer. It appears to have plugged in some of the pinholes that you see in the ethereum blockchain that some programmers and engineers have cited as problems going forward," he said.

Both platforms use smart contracts, but polkadot goes a step further, allowing developers to build their own blockchains that can connect to each other. Ethereum 2.0 is expected to add similar functionality when it goes live later this year or in 2021.

Polkadot does face headwinds though, not the least of which are crashing crypto prices, which are souring institutional interest and attracting regulatory scrutiny. Last Wednesday, the U.S. Securities and Exchange Commission delayed one of the many pending bitcoin ETFs before the agency. There's also no guarantee that polkadot will be widely adopted.

Bliss urges crypto investors to do their own research and make sure the underlying business or concept is bona fide. "[G]iven all the coins that are out there, it's easy to do some research and find the ones that have real businesses underpinning them in their movement, like Polkadot ... [T]hen you could make the investment accordingly if you don't want to have the volatile ride across the entire complex."

Jared Blikre is an anchor and reporter focused on the markets on Yahoo Finance Live. Follow him @SPYJared

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When actor Chris Noth learned that live music venues were allowed to re-open in New York City during the COVID-19 pandemic, he said it was a big relief.

A relief, not just because Noth is a huge music fan, but because he co-owns The Cutting Room, a live music venue and lounge in the city.

Best known for his lead roles in TV hits like Sex and the City, Law and Order, and The Good Wife, Noth opened The Cutting Room in 1999 with partner and Berklee College of Music alum, Steve Walter.

Noth told Yahoo Finance Live that live music venues in the city were hurting well before the pandemic due to financials and the price of running a venue in Manhattan."

"We are blessed to have the person who owns the building have patience, and he happens to be a music fan, so we were lucky, he said, referring to The Cutting Room's landlord. "A lot of places weren't so lucky."

Gov. Andrew Cuomo lifted nearly all COVID-19 restrictions on June 15, after 70% of adults in New York state had received at least one vaccine dose. State officials have largely left individual establishments to decide for themselves if they will require and enforce COVID protocols.

Many, like The Cutting Room, are working on the honor system and asking that non-vaccinated customers wear masks indoors.

We go with what the CDC (Centers for Disease Control and Prevention) says, Noth said. We're going to trust that if someone knows they're infected, they're not going to be out in the public, but right now, with the vaccinations the way they are, we are sort of trusting that the CDC is reliable.

Actor Chris Noth is co-owner of The Cutting Room, a music venue and lounge in New York City. Before hitting it big, Stephani Germanotta, commonly known as Lady Gaga, performed at the club during the early stages of her career.

Noths business partner, Walter, said the club is constantly getting calls from bands anxious to get back to live performances after more than a year of being off the stage. Musicians are dying to play. They're all calling. It's incredible how quickly the calendar is filling up, he told Yahoo Finance Live.

And that includes larger musical acts, that wouldnt normally play more intimate venues. It gives us little guys a chance because they can't play the Garden [Madison Square Garden] and all that the big audiences because the tours weren't set. So we can get some large acts that wouldn't play a room this small, Walter said.

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In addition to live music, The Cutting Room also serves food in a supper-club atmosphere. With the exception of some of its kitchen staff, Walter said nearly all of the clubs employees are returning.

In the true spirit of entrepreneurship, Noth found synergy at the club for another one of his business ventures. In 2018, the actor bought a majority stake in the ultra-premium tequila brand Ambhar Tequila, which is now the official tequila at The Cutting Room.

Actor Chris Noth is a majority shareholder and brand ambassador for Ambhar Tequila. The boutique brand produces about 300,000 bottles of tequila a year.

The actor, who is reprising his role as the notorious Mr. Big in the Sex and the City sequel series, And Just Like That, said hes glad his club can be a showcase for all the great music out there.

They just need a place to come to be able to play their music. That was our original philosophy because we love music. We grew up in the '70s and '80s and late '60s and that's how our love for music was formed, Noth said.

When you think of all the venues that have disappeared, The Bottom Line, CBGB's, to name just two of the most famous, he said. I've always hoped that, when there's an empty space, that the city wouldn't give the tax breaks, so that when a small business comes in and they are willing to rent at a reasonable price, they give it to them, instead of waiting for a bank or a drugstore to take it, who have all the money in the world.

Alexis Christoforous is an anchor at Yahoo Finance. Follow her on Twitter@AlexisTVNews.

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Actor Chris Noth on the return of live music in NYC - Yahoo Finance

Philadelphia 76ers fans have been marinating in negativity since the team was stunningly bounced from the playoffs by the Atlanta Hawks. But just two days after their unceremonious exit, GM Daryl Morey is fighting back against that negativity and taking a positive view of his team and where they are.

"A lot of what I'm reading I frankly don't understand," Morey said in his end-of-season news conference Tuesday via ESPN. "People [are] saying the Sixers are in a bad situation.

"I don't choose to come here, [coach Doc Rivers] doesn't choose to come here if this is a bad situation. I mean, really 25 or 26 teams in this league would love to be in our situation with an MVP-caliber top player and All-Star, near All-Star, great young players who are signed for the long term, good veterans.

"So, we've got a good foundation. We just have to do better, I have to do better, everyone has to do better."

Despite Morey's optimism about the team's future, two days hasn't been quite enough for him to get over such a difficult loss. Not only were the Sixers the No. 1 seed in the East, they had multiple chances to demoralize the Hawks and run away with the series. Instead, they blew a 26-point lead in Game 5 and couldn't close the deal in Game 7, losing 103-96 tantalizingly close, but not enough.

"We need to be a better offensive team," Morey said via ESPN. "I mean we're two days after ... you can tell it's a little raw, still. I think if you replay that Game 7 a bunch of times and, you know, we execute better, then we win. But look, reality is reality. We didn't do it and, and frankly if we're squeaking by the second round that just tells me we're not, we're unfortunately not good enough, probably to win the title so we need to get better.

"But, you know, the game, that series, is still incredibly painful."

Morey laid out the honest truth: the Sixers' performance in the semifinals proved that they simply weren't good enough to win it all.

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Much of the Sixers fans' negativity has centered on Ben Simmons, and for good reason. His clear unwillingness to shoot the ball constantly hurt the team in the playoffs, especially in the Eastern Conference semifinals.

With Simmons' future on everyone's mind, Morey was asked "on several occasions" if he'd commit to having him on the roster next season, according to ESPN. Despite some fans' desire to load Simmons into a trebuchet and fling him into another state, Morey wouldn't say anything either way about Simmons' future with the team.

"We have a very strong group we believe in," Morey said via ESPN. "None of us can predict the future of what's going to happen in any, in any place. We love what Ben brings, we love what Joel [Embiid] brings, we love what Tobias [Harris] brings, in terms of what's next we're gonna do what's best for the 76ers to give us the best chance to win the championship with every single player on the roster."

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Sixers GM Daryl Morey quiet on Ben Simmons' future, but says most teams 'would love to be in our situation' - Yahoo Sports

American Airlines canceled nearly 600 flights over the weekend through Monday, and is cutting about 1% of its flights in July. That could be just the beginning of a rocky summer for travelers and a robust one for airlines. Delays, cancellations and higher fares could be the norm.

One word of advice for voyagers: "patience," said Helane Becker, longtime airline analyst. She laid out to Yahoo Finance Live the reasons behind the delays, and why they could very well continue.

First up is a central reason cited by American Airlines: worker shortages. Some are a factor of the COVID-19 pandemic, and some are due to typical airline operating procedures. American and other airlines like Delta Air Lines have announced they're ramping up hiring, but it will take time.

"Because of the pandemic, a lot of pilots that may not have retired until 2021 or 2022 or '23 accelerated their retirement to last year," said Becker, a senior analyst at Cowen & Co. For pilots who were temporarily sidelined when airline demand plunged, "it takes about a year to bring a pilot up from a furlough and get him or her ready to fly again."

For pilots who are working, "there's what I call the 16-13-10-hour rule, that basically says pilots can work 16 hours during the day, 13 hours overnight and need 10 hours of rest between shifts." That means the lower number of pilots can, for safety reasons, only work so much.

Secondly, not only are there fewer pilots, there are also fewer planes.

"Last year, you may remember, airlines accelerated retirement of a lot of aircraft," Becker said. One example was American, which permanently grounded 156 of its planes in 2020; Delta also said an early farewell to some of its Boeing jets as a result of the pandemic.

Finally, there's a perennial summer problem that's only intensified as a result of climate change: weather-related delays and cancellations.

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The final version of the 737 MAX, the MAX 10, takes off from Renton Airport in Renton, Wash., on its first flight Friday, June 18, 2021. Boeing's newest version of the 737 Max jetliner made its first test flight Friday, taking off near Seattle for an expected two-hour trip that the company hopes will signal improving fortunes for its most important plane. (Ellen M. Banner/The Seattle Times via AP, Pool)

"Pop-up thunderstorms wreak havoc with the industry, and you don't know when they're coming," said Becker.

Not only has the amount of precipitation increased in recent years that rain increasingly comes in what the Environmental Protection Agency calls "extreme one-day precipitation events." Tropical storm intensity has also risen.

The reason all of these issues are particularly problematic for travelers is that they've come amidst a surge in demand. This week, passengers traveling through Transportation Security Administration (TSA) checkpoints surpassed 2 million in a single day for the first time since March 2020. Monday's passenger traffic of 2.03 million compares with 2.72 million on June 21, 2019, according to the TSA.

That could mean a strong summer for airlines, said Becker and other analysts. That optimism, though, is not necessarily reflected in recent stock action. While American (AAL), for example, is up some 40% this year, the shares are down nearly 3% from a 52-week high in early June. Delta (DAL) has risen about 12% year-to-date, but is down 10% since a high in early April. United Airlines (UAL) and Southwest Airlines (LUV) have also sold off from highs earlier this year.

Julie Hyman is the co-anchor of Yahoo Finance Live, weekdays 9am-11am ET. Follow her on Twitter @juleshyman, and read her other stories.

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3 reasons why airline delays and cancellations could persist this summer - Yahoo Finance