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Markets Are About to Get Ugly According to These Charts

Optimism has peaked, according to two widely followed measures of U.S. economic sentiment. If history is any guide, bouts of equity volatility and plunging Treasury yields will soon follow. The U.S. Citi Economic Surprise index — the rate at which data exceeds analyst expectations — has started to fall after reaching a five-year high in December. Meanwhile, the Federal Reserve’s index of the public’s uncertainty about the outlook for monetary policy is climbing after reaching a three-year low in November. Though the economy remains strong, unbounded enthusiasm has run too…

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Headlines 

Taylor Has Complex History to Overcome If Picked as Fed Chair

John Taylor has a complicated history with the U.S. Federal Reserve that could force him into a hard pivot if he’s selected as its next leader. The Stanford University economist, who is on President Donald Trump’s short list to lead the central bank, wrote the monetary policy rule that Fed officials use as a constant reference, and many of the institution’s own economists are schooled in his ideas. On the other hand, he’s been a vocal critic of recent Fed policy, arguing that the institution should hew closer to the…

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