Know What's Happening in US Economy
Know What's Happening in US Economy
Traders now price a greater than 60% chance the Federal Reserve will raise rates by October, after the March meeting left the policy range unchanged. A surge in Brent crude above $109 per barrel has pushed 10‑year Treasury yields to roughly 4.37%, prompting a wave of equity outflows and a shift of capital into cash. Bitcoin slipped just under $70,000, mirroring the decline in gold and risk assets as tighter financial conditions dominate. The market’s focus now hinges on oil‑driven inflation data, the upcoming jobs report, and the Fed’s next policy signal.
Market strategist Ross Gerber warned that persistent inflation is dampening optimism for both equities and bonds. He observed a surge in selling pressure, indicating investors are turning more bearish. Gerber stressed that inflation is unlikely to subside soon, undermining the...
"Despite political pressure and a painful recession, [Volcker] held firm to his commitment to bring inflation down. In a speech at the Economic Club of Chicago on May 19, 1982, with unemployment above 9 percent and critics calling for him...
U.S. labor market weakness is simultaneously curbing both supply and demand, ending the steady inflow of passive capital into equities. Immigration has stalled, population growth slowed to 0.5%, and labor‑force participation fell back to 62%, while AI and higher rates...
Jerome Powell told reporters he would assume the Fed chair’s duties pro tem if a successor isn’t confirmed by May 15, a move the Breitbart Business Digest says pits him against former President Donald Trump. At the same time, the Fed’s...
Operation ‘Rage Flip’ erupted in late March, exposing extreme price volatility as a chart‑driven rally flipped a steep decline into a rapid surge. Traders on the floor, including Stephen Walton, described the move as a herd‑culling event that overwhelmed typical...
Fed Chair Jerome Powell announced he will stay in the role pro tem until the Department of Justice investigation into his comments concludes, extending his leadership beyond the May term expiry. Mortgage rates climbed above 6.5%, threatening the pent‑up demand...
Whereas the Iran war shock has barely budged inflation expectations and no more than mildly jolted expectations of monetary policy in the US, the same shock has completely transformed the outlook for many other central banks. More charts, graphs, and...
1/6 The 10-year yield was up 13 bps yesterday, closing at 4.38%, the highest level since late July The bond market's view changed in the last few days. 🧵 https://t.co/QnAMwCkKch
A review of eight recent news items reveals no substantive reporting on a direct conflict between Fed Chair Jerome Powell and former President Donald Trump. While Trump appears in unrelated headlines, specifics about monetary‑policy disputes were not disclosed.
1973 oil embargo: inflation went from 3.6% to 12.3%. Fed's current forecast for 2026: 2.7%. Brent is at $110. Up 54% in a month. Either this time is genuinely different, or the Fed is the most optimistic institution on earth. History doesn't care about...
It’s particularly amazing because we’ve had extensive methodological changes to CPI since the blue line ended, including a major one literally the month after it ended that make this comparison apples-to-oranges.
In this brief episode, Andrew Sheets draws a parallel between March Madness basketball and the sudden shift in market narratives caused by the Iran conflict and a potential oil shock. He outlines how, after a period of strong economic signals—low...
1/ Markets now think the Fed is more likely to raise rates than cut them this year. A rate hike is not my baseline scenario, but I see the risks rising, for the following reasons. (Link to column in next...
UST 10 Yr Notes went home 4.386 on Friday, yield about 10.3bp's higher. 20 Yr Bonds just 2bp's away from that 5% Handle.
The Federal Open Market Committee voted 11‑1 to keep the federal funds rate in the 3.5‑3.75% range, raised its 2026 inflation projection to 2.7%, and nudged GDP growth to 2.4% as Middle‑East conflict spikes oil prices and job gains stall....
Lost count of all the times people scoffed at a 1970s-style inflation “double top.” Not as much laughter now. 😞 https://t.co/FTwzh0yQik
🚨 INSIGHT Nearly half of Americans predict a “total economic collapse” within the next decade. https://t.co/30yqgjJkPX
Wholesale prices for fresh and dry vegetables surged nearly 50% in February, propelling the Producer Price Index (PPI) for final‑demand goods up 1.1% month‑over‑month—the fastest rise since August 2023. Overall wholesale food prices climbed 2.4%, with egg prices jumping over...
As Dave Walker, former Comptroller General of the US, and I wrote in @FortuneMagazine, Washington rejected a Swiss-style “debt brake” earlier this week. NO DEBT BRAKE = FISCAL INSANITY. https://t.co/Tw28jA4nUE
PCE, CPI & PPI were running hot even before the Iran war’s oil shock, writes @JohnFMauldin @DavidBahnsen says Feb jobs data was “surprisingly bad” Mauldin sees the familiar muddle-through story with AI capex, services & manufacturing I see an "unsurprisingly bad" macro https://t.co/EGIOgUMGxc #Inflation...
The Federal Reserve Bank of Philadelphia reported that its March manufacturing diffusion index climbed to 18.1, a six‑month high and well above economists' 10.0 forecast. The surge suggests a surprising rebound in regional manufacturing activity amid broader economic slowdown concerns.
The 10-year approaching 4.4% and then we get this "drop" from the president. Another FAFO moment? This coming week will be epic.
Yields on the two-year Treasury note are up 0.516 pp since Feb. 27, the day before strikes on Iran, to 3.893%. That’s the highest close since July. The gain over the last three weeks is the largest since May 2023 (the...
Federal Reserve Governor Christopher Waller warned that a prolonged oil price surge could seep into core inflation, making any shock more than a transitory blip. He noted that while structural inflation is edging toward the Fed’s 2% target, tariffs are...
Due to the war in Iran and the resulting inflationary effects, the market is now pricing in zero rate cuts from the Fed this year (in contrast to the previously forecast two rate cuts). Moreover, the market is now forecasting a...
Bloomberg on the selloff in the US bond market: “Not since 2023, when the central bank was still lifting rates, has the two-year yield risen so much above the Fed’s rate ceiling. On Friday, five-year yields surpassed 4% for the first...
The Iran war has so far left the US economy largely intact, with the Atlanta Fed nowcasting a 2.1% annualized Q1 GDP rise and the Dallas Fed’s Weekly Economic Index at 2.6%, suggesting stable activity through mid‑March. While global oil...
Putting the fiscal cost of the Iran war in context. $200 billion > $194.9 billion, which means that Trump is planning on spending more on the Iran war than he took in with his tariffs which raised tons of revenue....
"Caution is warranted," Waller tells @steveliesman on Friday after voting with the majority at the Fed this week to hold rates steady as the Iran war upends the economic outlook. "It doesn’t mean that I’m going to stay put for the...
In this episode, host Scott Yalloway recounts his surreal experience at the Vanity Fair Oscars after‑party before diving into a focused interview with Ed Yardeni, president of Yardeni Research. Yardeni explains why his team raised the probability of a U.S....
Fed governor Chris Waller to CNBC's Steve Liesman: I was ready to dissent for a rate cut after the February jobs report came out. But the inflation picture is looking worse and has become more of a concern because the Strait...
That is one looong blue line. A month ago, Fed fund futures were pricing in the next cut as June. This June. Now it's October '27 https://t.co/HCElEgtrLE
Retail sales in February rose 0.28% from January and surged 6.24% year‑over‑year, marking the fifth straight month of monthly gains. Over the first two months, total sales were up 6.04% YoY and core sales climbed 5.76%. Growth was broad‑based, with...
Yup. Market pricing in 2-3 rate hikes for ECB and BoE How many for the Fed?!
Mkts expect a Fed hiking bias, instead of cuts. 10yr Treasury yields up even more today (4.38%) With long-term interest rates rising, the Hormuz shock is getting priced as more of an inflation shock than one that triggers recession (caveat: mkts aren't...
When the Fed cutting cycle started in 2024, 20Y rates quickly moved to 4%. And after 175bp of cuts, the 30Y rates is back up to 5%. The latest wiggle is obviously the Iran effect. But the divergence is arguably 2 years...
$TNX Monthly. Head-fake lower last month. Surge higher this month. At apex of multi-year triangle. This is ideal bullish setup for rates on 10-Year to explode higher https://t.co/aCdWZY5Kd9
In the 2020s the US economy has survived: A pandemic Supply chain shocks 9% inflation 0% --> 5% interest rates Tariffs War Oil price spike We haven't had a credit cycle or real recession in 17 years https://t.co/eXayk77G0L
So how has the plan by @SecScottBessent to not term out the debt and keep rolling bills worked out?
Careful when core<headline. It’s a household SOS warning something is going to break as the saving rate (an AVERAGE hugely weighted towards flushest & wealthiest) fell from 5.2% in Q1 ‘25 to 4.0% in Q4, a 1-in-5 postwar event per...
Fwiw I still prefer restarting QT and solving the uneven distribution of reserves and killing inflation through term premium expansion vs hiking fed funds https://t.co/tp7owr8gxQ
Waller’s not wrong about passthrough effects. They vary over time and are likely to be stronger the longer this shock goes on That said, the wise course is to look through them. It just turns out to be really hard in...
inflation shows up on your screen much quicker than financial stability tremors and layoffs. hawk talk out of the gate is easy; hawk walk when UnE is up a percentage point and rising, not so much
Now powell and Fed will be forced to do an emergency rate cut and be late as high oil prices start slowing down economy into recession.
It'll be interesting to see how this looks over the next week, as we get more post-FOMC Fedspeak. But my proprietary measure of FOMC hawkishness climbed even further after Powell's press conference. https://t.co/lNilk5T2yz
You don’t SAY. This zero bound fails miserably too On @CNBC Waller said research suggesting that the break-even rate for employment is ~zero is another challenge for assessing labor-market strength “My brain understands the math, but I can’t get through my gut...
Warsh will be out hawkes this year; Trump might as well keep Powell as Fed chair until the inflation story changes. No point in criticizing your guy for rate cuts now.
Waller having his own personal Trichet moment: "oil can bleed through to core inflation at some point"
Since 2019, bank lending to non-bank financial institutions (NBFI) has grown by nearly 60% vs only about 20% to non-financial corporations. Divergence has widened since mid-2022 when corporate lending stagnated while NBFI lending continued to rise steadily https://t.co/QEUhoq4feU
