The Atlanta Fed Flexible CPI is a price series developed by the Atlanta Fed to capture the price of items that change the most frequently. This price series is supposed to be more responsive to real-time changes in the economy than the CPI, so generally,…
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The US Purchasing Managers Composite Index (PMI) increased in January to 46.6 from 45 in December, representing a slowing economy but slightly less pessimistic than expected and better than the month before. As a preliminary release for January, this US PMI report gives investors the…
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We got consumer price reports for many European countries this week. The main story for the Eurozone is still one of sticky inflation driven by elevated food and fuel prices, though there are some differences emerging among the major European economies. In this analysis we…
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With mortgage rates down, mortgage applications for purchase surged last week, indicating some renewed enthusiasm from potential home buyers. Additionally, the NAHB’s survey of home builders showed what could be a bottom in negative sentiment or at least a reprieve from a terrible 2022. Friday’s…
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In an abrupt volte-face, on December 7, 2022, China announced an end to its “Zero-COVID” policy after the country endured almost three years of damaging lockdowns. This began a flurry of speculation on the impact that China’s reopening would have on the world economy. Central…
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Overnight, traders pressed the Bank of Japan again on its Yield Curve Control (YCC). Japanese Government Bonds (JGBs) traded up to 55bps, exceeding the 50bps YCC. This prompted the Bank of Japan (BoJ) to intervene and hammer the rate back down to 50bps. At the…
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The December U.S. Bureau of Labor Statistics’ Consumer Price Index came in exactly as expected according to Bloomberg’s survey of economists. Headline CPI came in at -0.1% month over month and 6.5% year over year, and Core (CPI Ex Food and Energy) came in at…
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With winter not fully upon us, European industrial production has benefitted from lower energy prices. The mild weather has led economists to predict less dire economic scenarios, where recession fears have receded. November’s industrial production highlights the economic benefit realized from this winter’s mild weather….
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As the market continues to rally on Monday, we can’t help but ask ourselves what data nugget might we have missed from last Friday’s data? Let’s start with the more difficult data: the employment report. On the surface, the report showed a gain of 223,000…
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In a recent San Francisco Federal Reserve Publication titled “Monetary Policy Stance is Tighter Than Fed Funds Rate,” the authors argue that the “all in” policy rate is actually higher than the Fed Funds rate would suggest. They open: “The Federal Reserve’s use of forward…
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While many seemed to focus on the basics of the employment report like average hourly earnings (which don’t take into consideration industry mix shifts among the employed) and the payroll job beat for the month, there is one very important variable that revealed the weakness…
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There are many ways to decompose the bond market to identify the component pieces to infer what the market is pricing in. The nominal long US Treasury bond is a function of two things: 1) the average expected future nominal short-term interest rate, and 2)…
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The Federal Reserve has been raising rates at an extremely aggressive manner in 2022, taking the federal funds rate from 25bps to 4%. At the same time, they have been letting assets run off their balance sheet in quantitative tightening. This double-barreled tightening is likely…
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Last night, the Reserve Bank of Australia stopped short of another 50bps hike to its overnight cash rate. The RBA’s statement contained one nugget that helps explain its decision: “One source of uncertainty is the outlook for the global economy, which has deteriorated recently.” While…
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This is the name of a recent research piece from the San Francisco Federal Reserve written by Adam Shapiro. The paper attempts to separate supply and demand factors to evaluate which is causing the elevated rate of inflation. The paper concludes that supply factors are…
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