Costs Surge, Firms Pass some, Growth Remains Modest
Costs are rising fast again. Companies are trying to pass it through, but not fully. Activity is expanding modestly.
Iran War Stalemate Fuels Oil Price Gamble
The bottom line is the Iran War is "stuck." No War (shooting) No Peace No Shipping No Crude Oil, LNG, Fertilizer, and/or Helium And it will stay "stuck" until circumstances change. The most likely change ... * The US/Israel restart kinetic attacks with the goal...
Miran’s Exit Leaves Fed with No Remaining Doves
Interesting chart, although there is some hard-to-quantify nuance regarding how dovish/hawkish each individual member truly is.
Historic LEI/CEI Low Signals Recession, Cyclicals Set to Crash
The ratio of Leading Economic Indicators (LEI) to Coincident Economic Indicators (CEI) showing the steepest decline in the entire history of the metric and now at a level typically seen during or just before recessions. Small/mid + cyclicals rip hard once...
Short‑term Oil Loss From Hormuz Can Be Offset
In the short-term and for a limited time, the losses of oil from the Straits of Hormuz can be made up. More at today's Chartbook Top Links: https://t.co/xfKk6k7sQC
China's Auto Subsidies Outpace US Tariffs on EU Cars
Neither the wolf nor the shepherd are friends to the sheep. PRC subsidies and vertical integrated auto companies are conquering the world (outside the US and Canada). US just hiked tariffs on EU light vehicles to 25%, up from...
Presidential Belligerence Drags Markets Lower, Pricing Risk
"Every time the president leans into belligerence... the stock market falls." Markets can’t vote, but they can mark down the price of risk. https://t.co/BapJYuCaQL
Markets Rebound in Days, Not Months After Shocks
The speed of this market recovery is striking. A nearly 10% drop during the Iran conflict was erased in just 11 trading days, one of the fastest rebounds ever. It shows how markets behave now. Shock, then immediate repositioning. https://t.co/vGeqv04VWN @a16z
EU Poised to Scrap Turnberry Deal Amid Weak 301 Case
Gives the EU an excuse to tear up Turnberry deal and retaliate in a world where Trump lacks the ability to use IEEPA to raise tariffs on everything overnight. The 301 case against the EU's overcapacity was rather thin -- 1/2
Iran Blockade Foreshadows Epic Taiwan Blockade
The blockade of Iran sets the table for the coming blockade of Taiwan. It’s going to be a mess of truly epic proportions.
Export‑Import Gap Surges Post‑COVID, Spike After 2020‑21
The gap between imports and exports actually widened much more in 24 and 25 than during the COVID years. and my argument was in fact that there was an important break in 20-21, tied to the property market...
Japan's FX Trade Slashes Net Debt, Cuts Gross Debt
Alternative framing for Japan's intervention Japan sold $35 billion of dollars bought at around 80 yen the dollar for close to 160 yen, booking a massive profit that reduced Japan's net public debt -- and in the process brough Japan high...
Looser Labour Market Means Milder Inflation Shock, Smaller Policy Response
Yesterday the BoE put out some analysis, basically showing the difference between now and 2022. Because the labour market is not so tight anymore, the shock to inflation should be much less persistent - justifying a smaller monetary response (if...
Tech Rally Defies Stagflation as ISM Stalls
Basically, the call wall (SPX $7200 was ceiling/now floor) keeps getting rolled up as AI/Tech/Memory names beat, while the real economy enters stagflation. US APRIL ISM MANUFACTURING INDEX UNCHANGED AT 52.7; EST. 53.2 US ISM MFG PRICES RISE TO 84.6, HIGHEST SINCE...
UAE Increasingly Breaks From OPEC's Leadership, Says Expert
"“It's pretty clear that the UAE has been diverging from OPEC’s leadership for a while now,” Ellen Wald, president of Transversal Consulting and an expert on energy and geopolitics, told The Dispatch." https://t.co/T78DIjRG0W Quoted here along w @Dr_Ulrichsen @gbrew24
Foreign Central Banks Stopped US Treasury Purchases; Domestic Funding Rises
Multiple things are simultaneously true: 1) Foreign public sector (central banks) are not buying US treasuries for over a decade, led by China. 2) Foreign private sector is still buying treasuries. 3) Foreign buying is not keeping up with issuance, so more is...
US Munitions Depleted: Half of Key Systems Exhausted
My take @FortuneMagazine on the depleted US munitions: "In Iran, the US has burned through 45% of its Precision Strike Missiles, 50% of its THAAD interceptors, 50% of its Patriot PAC-3 inventory, and 30% of its Tomahawks." US WEAPONS CUPBOARD = EMPTY https://t.co/M437EG5SfV
China's Zero Tariffs Shift Asian Alliances Amid African US Pressure
China. No tariffs on 53 countries in Asia. While Africa had US tariffs and now faces impact of Trump’s Strait of Hormuz disaster. How will the countries align?
Abnormal Committee Votes May Define Warsh’s Fed Tenure
"“This is not normal [a reaction to the party-line committee vote] is going to be a theme,” Sahm told Fortune. “Frankly, it could be a theme for Warsh’s tenure as Fed chair.” https://t.co/K0UUJy4cAK
U.S. Diesel Demand Remains Robust Despite Iran Conflict
U.S. diesel consumption has been strong so far in 2026 Effects of the Iran War have not materially affected the U.S. economy yet #Diesel #OilMarkets #EnergyIsTheEconomy #IranWar #Macro #Commodities #Demand https://t.co/qQSUV8pEch
UST Auctions Trigger Record MOVE Spike and VIX Surge
The Great MOVE UST Volatility Crash of April 2026: Blue = MOVE; red = VIX; green = Oil Mar 24, 25, 26 = 3 straight ugly UST auctions Mar 26 = MOVE hits 115 (near dysfunctional levels) Mar 27 = MOVE & VIX peak...
ChatGPT Misses Many
I asked ChatGPT to extract all quotes from Kevin Warsh from the transcripts when he was Fed Governor 2006-2011. It only gave me select quotes, here are those from 2007: https://t.co/Ivh7fpN0OA
China’s Growth Defied CCP; Market Capitalism Poised to Win
since 1978, china’s economy grew in spite of the ccp, not because of it. as ai creates new challenges just as their economy slows, their ham fisted approach is likely to cause more harm. this will be another great victory...
Crude Surge Delays Rate Hike Odds Until Mid‑2027
It will take some time before we'll know if there will be second round inflation effects due to the surge in crude prices. Why hike odds aren't higher for '26 but with some delay in mid '27
GCC May Leverage Insecurity for Cheap US Funding
Very much agree and it wouldn't totally surprise me if the GCC countries are trying to play on that insecurity to get a bit of cheap funding from the US ...
Dallas Fed Warns Inflation May Stay Above Target Longer
Dallas Fed President Lorie Logan explains her dissent, which objected to suggesting that the next rate move is more likely than not to be a cut: "I am increasingly concerned about how long it will take inflation to return all the...
Oil Market Will Need 2.7 MMbpd Surplus Post‑Hormuz
We're actually really going to *need* a supply glut after this end to fill in the hole left by Hormuz. Minimum 1 billion barrels lost, requires an *annual* surplus of 2.7 MMbpd to recover. And that assumes Hormuz reopens today, which it...
Takaichi's Low‑Rate Push Risks JGBs, Only Hikes Cure
Takaichi wants to intervene in markets to mitigate inflation, but keep rates low to support her agenda. JGBs will suffer until she realizes hiking rates is the only way to durably keep inflation in check and support JPY. Bank lending has...
Manufacturing Surge Reflects Stockpiling, Not Lasting Growth
"The surge in manufacturing activity in April is not the cause for cheer that at first glance it suggests. A key driving force behind the upturn is the need for companies to get ahead of further feared price rises and...
Markets Defy War, Oil Shocks, and Credit Stress
Markets keep rising despite war, oil shocks, and emerging stress in credit. On the latest Last Call, @CultishCreative and I bring together @EpsilonTheory, @jimwpaulsen, @kevinmuir and @spotgamma to break down why—and what it means going forward. https://t.co/X86Sn4xh16
U.S. Treasury Can't Afford Gulf Family Oil Bailouts
The US Treasury is too poor (and has too few reserves) to bailout -- or even provide a swap to -- the very rich Gulf family oil and investment businesses ... With @StephenPaduano https://t.co/Wz3bR4fXlH
Geopolitical Turmoil Directly Raises UK/EU Household Energy Bills
Me in FT today: “Given that around 80 per cent of UK and European energy still comes from fossil fuels and a large share of that is imported, every geopolitical shock becomes a household bill shock.” More below. https://t.co/qH7tYyZDBT
Sweden's Low Inflation Mirrors Sub‑Target Money Growth
Sweden’s inflation is 0.5%/yr. That’s BELOW its 2%/yr target. SE’s money supply (M3) is growing at 4.5%/yr, BELOW Hanke's Golden Growth Rate of 5.8%/yr, a rate consistent with hitting its inflation target of 2%/yr. THE INFLATION STORY = A MONEY SUPPLY STORY....
Red Sea Tanker Transits Jump 66%, Eclipsing Pre‑crisis Levels
Red Sea tanker transits surpass pre-Houthi crisis levels in rush to secure Saudi barrels ▶️379 crude oil tanker transits recorded in March, up 66% month on month ▶️Dark transits surge as many tanker operators opt to disable AIS while sailing past Houthi-controlled...
War Sparks Massive Commodity Surge, Stocks Rise, Volatility Falls
Since the start of the Iran war... Jet Fuel: +80% Sulfur: +68% Heating Oil: +56% WTI Crude Oil: +55% Brent Crude Oil: +52% Diesel: +48% Gasoline: +47% Urea: +47% European Nat Gas: +44% Fertilizer: +23% Coal: +13% Palm Oil: +13% Iron Ore: +8% Wheat: +6% S&P 500: +5% $VIX: -15%
Big Money Prints Don't Guarantee Immediate Gold Gains
The point of this statement is massive money creation can cause inflation and asset gains. But owning assets expecting a "big print" isn't necessarily a great idea. The biggest print in history in 2021 and gold took 2...
USTR's Section 301 Roadmap Lacks Targeting and Metrics
"The road map the USTR has presented in the most important Section 301 investigation, looking into 'excess capacity' in other nations, is neither targeted nor aimed solely at abusive trade partners. It is also not based on any defensible metric"...
Post‑COVID US Consumer Spending Surge: Will It Last?
Since COVID, the US has been riding a sustained surge in consumer spending. Will it continue? Today's Chartbook Top Links just dropped, check it out: https://t.co/6zzy84M54y
M2 Growth May Have Followed, Not Fueled Economy
What if over the last 50 years M2 grew WITH the nominal economy and didn't CAUSE the growth of the nominal economy?
War‑driven Inflation Could Force More Rate Hikes, Dissenters Warn
In explaining their dissents this week, Kashkari and Hammack cite resurgent inflation risks stemming from the Iran War. Kashkari (below) says a "series" of hikes might be needed if the Strait of Hormuz stays closed, "even at the risk of...
Becoming
I might even be a little more hawkish than this Hammack statement, where I’m no longer as sure about the downside risks to growth and employment: https://t.co/uk3gVJjAZQ
Kashkari Urges Fed to Keep Policy Flexible Amid Iran War
Minneapolis Fed President Neel Kashkari: "Why I dissented" He says the policy statement should signal the next rate move could be a cut or a hike given the broader range of outcomes from the Iran war. He lays out two modalities: a...
Strong Trade Ties Help Keep Nations at Peace
"economists have swooped in with a smattering of new studies arguing that yes, strong trade ties are pacifying." https://t.co/cBadyzUCSb https://t.co/h2JB5bvK4N
BOJ's Massive Yen Intervention Yields Little Effect
From our latest @ForwardGuidance…”throwing good money after bad”… BOJ intervention >2x the size of recent Yen purchases with minimal impact. https://t.co/Unck13wfjJ
Geopolitics, Fed Legacy, and Dollar Surge Dominate Podcast
On this week's podcast: 1) Is the Iran crisis close to a tipping point? 2) What is Powell's legacy? 3) Is US exceptionalism back and the dollar about to rip? And an unusual amount of bickering because @freyabeamish just wont stop talking about abstract...
Yellen Pushes Massive Fiscal Spending Despite Recent Money Surge
Yellen (USTreasury then) said it’s “time to go big” fiscal — and of course gets a complete free pass from financial media, why? *Over 40% of all dollars ever created were done so in 2020-2021. cc @NickTimiraos
Dollar Softens as Markets Await US Leadership
May Day: Market Looks for US Leadership: In holiday-thinned markets, the dollar is mostly softer as North American leadership is awaited. In light of yesterday’s surge in the yen, and contrary to our expectation, it does appear that Japanese officials…...
Derivatives Trim BoC Rate Outlook by 22bps, Hikes Discounted
5 G10 central banks met this week and they all delivered to varying extents hawkish holds. The derivatives market adjusted expectations for this year’s course by 22 bp for the Bank of Canada. Two hikes are now...
Households Shift to Short-Term Bonds After 2024 Rate Cuts
"Since the Fed started cutting interest rates in 2024, households have been buying the front end of the yield curve and selling the long end" -Apollo Slok
German Unemployment Hits 6.4%, Over 3 Million Jobless
Good Morning from Germany, where econ stagnation is increasingly weighing on the labor market, despite demographic change. In April, the unemployment rate rose to 6.4%, and the seasonally adj number of unemployed climbed above 3 million for 1st time since...