In the most recent FOMC meeting, the committee decided to refrain from raising rates again, but held open the prospect for further hikes this year. They also took back two anticipated rate cuts next year. Along with the Summary of Economic Projections that the Fed...
After yesterday’s testimony by Fed Chair Jerome Powell to the US House of Representatives I analyzed its sentiment on key issues compared to his previous four FOMC policy statements, using ChatGPT. The table below shows the results. Unsurprisingly, ChatGPT left the sentiment for both inflation and...
In the United States, Core PCE Inflation is still 5.0% after a recent reversal in disinflation. This measure is followed by the Fed and excludes volatile food and energy inflation. It has remained elevated on an annualized quarterly basis, with a 1-year percent change of...
Credit conditions are tightening in both Europe and the United States. Our analysis follows in our mid-quarter update, Tightening Credit. Prefer to download this presentation in PDF? Please click here. 1. Summary -Credit conditions in both Europe and the United States tightened significantly recently. -We had our AI engine...
Tomorrow, the University of Michigan’s Consumer Sentiment Survey will give us more information on US consumers’ inflation expectations. The survey respondents’ inflation expectations, as other analysts have pointed out, are highly correlated with gasoline prices, which rose in March by 3.7%. This survey, along with...
The Federal Reserve’s balance sheet grew by $394B in the past two weeks. In the context of all G4 central banks, this move alone erases half of all quantitative tightening (QT) progress since the beginning of the year. A directional change like this could indicate...
Yields on 10-Year Japanese Government Bonds have fallen by about a third over the past two weeks, as shown in the chart below. Given the tumult surrounding banks recently, and a series of relatively dismal economic data releases out of Japan, this isn’t exactly surprising. This...
To shore up Silicon Valley Bank and the other failed banks, the Federal Reserve extended an open-ended line of credit via its Bank Term Funding Program (BTFP) and discount window borrowings. So far, this program has increased the Fed’s balance sheet equal to roughly half...
We just experienced the fastest bank run in history with the closure of Silicon Valley Bank. Apparently over 40% of the company’s deposits fled last Thursday and early Friday before closure. To put this is context, when Continental Illinois—at the time, the largest ever bank...
In anticipation of tomorrow’s rate decision, we saw another indicator today that the Federal Reserve has been successful in stemming the tide of inflation. The Employment Cost Index for the fourth quarter of 2022 came in under expectations at 1% quarter-over-quarter, or about 4% annualized....
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...
Over the weekend, we got a slew of data showing a generally weak economy. Below are the actual data compared with the expectations from Bloomberg. Of course, the headline grabber was the -31.4% drop in residential property sales, but across the board, from industrial production to...
