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Daily
Every morning
Weekly
Tuesday recap
At the Fed press conference, Powell reflects some frustration that inflation hasn't moved more sharply toward target, as tariff-fueled prices are still working their way through the system. This is a moderately hawkish presser, for reasons that largely pre-date the Iran war.
There's not really any reason why we should think that tariff driven inflation shocks need to be seen to be proven they are temporary.
Don't understand why another supply shock should affect the path of rates. Excessive focus on supply shocks as an explanation for pandemic inflation is a problem. Its causing excess fear from poliymakers today.
In response to a question from @colbyLsmith, Powell acknowledges that 5 years of missing the inflation target will help inform the degree to which the FOMC can look through the oil price surge.
Don't know why he said this, services inflation is also accelerating across a broad range of categories
Powell: "Near term measures of inflation expectations have risen in recent weeks likely reflecting the rise in oil prices causes by supply disruptions in the Middle East"
Powell just OMITTED this line about "disinflation in the service sector" (vs January press conference) https://t.co/knGJ2D4YW2
The Fed disagree with markets on this (and I largely agree). A supply shock -- especially one that doesn't really move core inflation -- should not automatically lead to higher rates. https://t.co/V0LS0P6sGE
According to TSLombard, Trump’s numbers are horrible on just about everything, but on the economy it is looking really bad. More charts and graphs featured on today's Chartbook Top Links in the comment below. https://t.co/Ro8tuPfMZk
It is (too) low. Guessing some of the Fed officials were not willing to fold in Feb CPI data into their projections. And certainly not today's PPI data
The distribution of the FOMC inflation outlook shifted to the right (higher) for 2026, 2027, and 2028 https://t.co/6hxNK4fUdP
Fed SEP shows a lot of optimism with GDP growth picking up, the unemployment rate coming down and inflation easing.
Core PCE inflation has been marching upwards (>1% above target). Yet Fed officials are only inching up their forecasts (they're still offsides) No downside changes to u3 or output gap. Yet the Fed is still penciling in a cut for this year....
Take a look at the Fed's new projections: 1 rate cut in 2026 1 rate cut in 2027 Higher inflation forecast **Slightly higher GDP forecast** --> this signals they are NOT projecting "stagflation" Unemployment rate staying around the current level (4.4%) Bottom line: Fed currently signaling...
No change to the FOMC's short-run rate projections, but interestingly, median FOMC participant sees long-run growth now at 2% (up from 1.8% in December) and R* at 1.1% (up from 1%). https://t.co/dAHaot3Kk4
JUST IN: The Fed leaves rates unchanged (3.5 to 3.75%). **The projection is for 1 rate cut in 2026** 11 Fed leaders voted for this Only 1 dissent (Trump official Stephen Miran) The statement says: "The implications of developments in the Middle East...
Insta-read #FOMC: No change in rates No change in '26 or '27 dots 1x dissent (slight hawkish) "Uncertain implications" of Iran Two-sided risk language
Hot Producer Price Inflation Adds to Fed’s Complex and Worsening Inflation Problem. Worst 6-month PPI inflation since August 2022 (+5.3% annualized). After multiple rate cuts by the Fed, inflation heats up everywhere: services, food, energy, other goods https://t.co/bCQedto2Yy https://t.co/l9dugS4fI2
If Powell focuses more on the upside risks to inflation ( which is likely going to be the case ) I believe Oil can see some initial downside on this due to possible future demand contraction concerns. If that becomes the case...
We are in a stagflation environment and we are getting more deep into it. The FED is trapped already. If they hold for too long or consider hiking to control inflation —> they will make the already weak labor market even more...
What if the United States doesn’t care about reopening the strait for Europe? My latest gCaptain Op-Ed 👇
Ouch. A standard estimate (ballpark) is ~ 10 mbd/ 10% of world supply is now off the market. Some elasticities were closer to -0.1, which implies a price hike of up to $100. This elasticity would...
Israel's reckless escalation in attacking Iran's South Pars gas facilities - hitting onshore processing facilities for Phases 3-6, gives Iran plausible excuse (if it needed it) to hit back against regional energy facilities Neutrals & world energy consumers will suffer https://t.co/Kx7MytxmEn
Fed: "K-shaped economy, firms can't pass through price increases." Data: "Firms pass through price increases."
russia sending two shipments of oil. and gas to…cuba. will president trump order interdiction? i’d say pretty good chance he will.
OUT NOW - @SquirrelMacro loves owning stocks but keeps seeing reasons to lighten his bag, from: - mega IPO issuance of money-losing companies - cracks in software & private credit - U.S. consumer weakening Apple https://t.co/qZiDfSFK94 Spotify https://t.co/zqeGlNjrbb https://t.co/53hmkQuqqX
Let's unpack this.. What if the White House has no intention of reopening the Strait of Hormuz? What if this war is really about ships & tariffs? I had a long discussion with senior DOE official yesterday on background. I can’t share...
20% of global oil flows through the Strait of Hormuz. It's been disrupted for 3 weeks. IEA released 400M barrels from reserves. That tells you how serious this is. https://t.co/KrxQw3KVSX
IDK if this is really much of a silver lining. On trend means that trade services are passing on costs at twice the pre-pandemic pace. That speaks to embedded inflation above target. https://t.co/IwClLNNndO
it is true that 2026 is seeing the most sudden shock to oil and gas supply. But both 1973 and 1979 had a very significant effect on long-run output as well. More featured on today's Chartbook Top Links in the...
Even though PPI in February printed high, the components that filter into PCE (including downward revisions for December) came in a bit lower than the sharp-pencils anticipated. February PCE is still expected to be firm, but a touch less so...
Brent crude oil prices surge to $110/barrel. Israel strikes Iran's largest gas plant. Iran is now announcing that some Gulf energy sites are "legitimate targets."
Ed Yardeni tells Squawk Box the Iran war could trigger a 10%-15% market correction. https://t.co/N1pfsujcVF
I think this is the most important question to understand moving forward. Asked @BobEUnlimited about what his checklist looks like for when oil shocks flip from inflation to demand destruction
In some of Russia's harshest criticism of the US war in Iran, which Putin has tried not to say much on, top aide Nikolai Patrushev calls it a "tragedy" that will "set global trade and economics back years" and "has...
The Trump Administration makes way too much of the bilateral balance with China -- Monthly imports from Taiwan alone topped imports from China in the last quarter of data 1/2 https://t.co/IOKB3Ii1lH
Great quote that speaks to the Fed's challenging task of (1) looking through supply shocks while also (2) maintaining a robust nominal anchor. As folks like @IrvingSwisher and I have said for sometime, stabilizing the growth path of aggregate nominal...
How China Is Quietly Helping an Isolated Iran Survive—From buying oil to selling rocket parts, China gives Iran critical support @austinramzy @RoryWSJ https://t.co/xCbI1lO7VO https://t.co/xCbI1lO7VO
"A careful look at the current state of international market freight rates shows that, in fact, substituting a foreign flag tanker on a domestic route currently served by a Jones Act tanker would more than likely result in an increase...
Trump’s tariffs and the US-Israeli war on Iran are sending fertilizer and diesel costs through the roof. Diesel is up ~$1/gallon in a week. Urea fertilizer has jumped from $470/ton to up to $585. This jump in cost spells trouble for Trump and...
JUST IN: Stocks drop as Wholesale Inflation (PPI) comes in higher than expected (+0.7% MoM vs +0.3% forecast)
Worth noting just how much the Iran war has changed expectations about the Fed and the future path of monetary policy. https://t.co/NBYZx2Uuza
In news not related to the Straights of Hormuz, China's trade surplus with the EU ticked up in the first two months of the year 1/ https://t.co/uWb594zrUq
Well, China isn't going to dip into its strategic reserves to help supply the rest of the world ... 1/2
1/5 Where Is the Demand Destruction? tl:dr - Asia because they are reliant on Middle Eastern Crude oil, and it is now over $150/barrel. This is keeping (for now) the American and European grades "only" ~$100. (% gain since the war) https://t.co/A6Rk6TjszH
"Does anyone really care if central banks raise or lower interest rates by 25 basis points, when the US president can send entire economies into a tailspin with a post on Truth Social?" Coppola Comment, 10th March. https://t.co/cCBaBOBPfB
February’s US Producer Price Index (PPI) was just released. Over the past year, the PPI REMAINS ELEVATED at 3.4%/yr. As the Fed pivots away from Quantitative Tightening to Quantitative Easing, it’s having trouble putting the INFLATION GENIE BACK IN THE BOTTLE. https://t.co/XFlfmOdN5q
Oil is a almost perfectly fungible commodity* with a single global price ... except during periods of stress Via JP's Natasha Kaneva, the spread between North Atlantic sweet light and the oil Asia normally buys has reached extreme levels * setting...
Trump spent years trashing NATO. He's been threatening to have the US withdrawal since his first term. Now he wants NATO to bail him out of a war he chose. Europe said no. That’s not the story of weak allies- that’s the consequence of...
An unintended consequence of the strikes on Iran’s gas fields? Turkey may be forced to import more LNG 🇹🇷 🚢 Iran sends gas from South Pars to Turkey via a pipeline (making up ~15% of the country’s demand) If that’s shut,...
