Cleveland Fed Predicts May CPI Rise to 4.2%
April y/y CPI was 3.8% The Cleveland Fed’s inflation nowcast has May y/y CPI jumping to 4.2%.
US Economy Bounces Back, Bolstering Dollar Strength
Week Ahead: US Economic Resilience Supports the Dollar: The resilience of the US economy is remarkable. The economy bounced back from near stagnation in Q4 25 (0.5% annualized pace) to 2% in Q1 26 and, and perhaps to 4.3% this...
Trump Tariffs and War Plunge Consumer Sentiment to Record Low
The University of Michigan's consumer-sentiment index dropped to a NEW ALL-TIME LOW. TRUMP'S TARIFFS & WAR MADNESS = CRUSHES AMERICAN SENTIMENT. https://t.co/jgRxLOfRVc
Warsh Praises Greenspan, Sidesteps Recent Fed Chairs
Warsh, in his first speech as Fed Chair, references Alan Greenspan's contributions -- not those of his successors. Not coincidentally, I would think, Warsh has been critical of Bernanke's, Yellen's and Powell's policies. He only says he's known 5 of...
Fed Chair Warsh Sworn In by Justice Thomas
Kevin Warsh is sworn in as Fed chair by Supreme Court Justice Clarence Thomas. As a Stanford undergrad, Warsh worked as an intern on Thomas's 1991 confirmation to the court. https://t.co/TXX94HfjZz
Expect a 50‑100bps Fed Hiking Cycle, Not a Single Hike
Rather than odds of one solo rate hike over the next 9-12 months, a better way of thinking about it is the market’s odds of a 50-100bps hiking cycle. The Fed won’t hike just once.
Greenspan: Tech Productivity Shifted From Rate Pause to Hike
as I said a while back, that's how the Greenspan comparison should have been framed. For Greenspan, tech productivity was initially a reason not to hike (against the hawkishness of his FOMC colleagues), not a reason to cut aggressively... and...
5% Yield Spike Could Trim S&P Valuation 15%
Per the Fed Model, when stocks and bonds are correlated and offer similar yields, when bonds reprice, so will equities. That’s the transmission link between rates and equities. If yields rise to 5%, how much would equities need to derate? Per...
Waller Signals Hawkish Tone, Warns on Inflation Risks
This is a hawkish speech from Waller. While he doesn’t think hikes are needed in the near-term, he comes across as quite troubled by recent inflation developments. I’ll thread a few highlights: https://t.co/p8k7nMSJ1e
Fed's Waller Signals Future Rate Hikes If Inflation Persists
Waller: "I can no longer rule out rate hikes further down the road if inflation does not abate soon" He becomes the latest Fed official to endorse removing the easing bias from the statement and making clear that a rate hike...
Hawkish Fed Chair May Calm Yields Amid Bond Vigilantes
Bond vigilantes are pushing back hard as markets brace for higher rates longer. The paradox: a hawkish Fed chair could actually help by bringing down long-term Treasury yields. 🟢 Open https://t.co/JYetOpImhO
SOFR Curve Signals Rate Hike, New Fed Chair Tested
With the SOFR curve now pricing in a rate hike instead of the three rate cuts expected earlier this year, it seems like incoming Fed Chair Warsh will be tested by the market, as often happens with leadership changes. Will...
Fed Hikes Loom, Bond Market Right, Economy Stumbles
JUST IN: Fed meeting minutes show majority of Fed officials signaling interest rate increases. The bond market is also betting on hikes. And the bond market has been right more times than anyone wants to admit. Home prices are up 60%...
US Economic Data Signals Slight Slowdown Across Sectors
Economic Calendar for Thurs May 21 8:30am - Building permits (prelim) for April: Expected 1.383M; Prior 1.363M - Initial jobless claims: Expected 210k; Prior 211k - Housing starts for April: Expected 1.419M; Prior 1.521M - Philly Fed manufacturing index for May: Expected 12; Prior 26.7 9:45 - S&P composite...
Fed Holds Easing Bias Amid Razor‑Thin Vote, Yields Drop
The Fed kept its easing bias in April, but the vote was razor-thin. Three members formally dissented, and many others wanted it gone. Meanwhile, bond yields are falling. 🔒 Members-Only https://t.co/AZ6OQxesU6
Powell’s Eight-Year Fed Tenure: Inflation Shocks and Independence Fight
From the FT article, “Inside Jay Powell’s turbulent eight years leading the Fed: Central bank chair’s tenure was marked by inflation shocks and his battle to protect the institution’s independence.” #economy #inflation #markets
Inflation Stays Above 2% Target for 62 Months
This is an all-time great line from today's FOMC minutes. Can someone please remind the Fed that inflation has been above their 2% target for...62 straight months.
Fed Members Lean Toward Tightening as Inflation Stays Above 2%
Fed minutes: “A majority of participants highlighted…that some policy firming would likely become appropriate if inflation were to continue to run persistently above 2%." "Many" indicated a preference for ditching the easing bias.
Fed Must Raise Rates to Calm Bond Market
Bond Bloodbath Worsens on Inflation, Lax Fed, and Flood of New Debt. Mortgage Rates hit 6.75%. Ugly trifecta that spooks the bond market. To soothe bond yields and mortgage rates, the Fed needs to hike, not “look through” inflation https://t.co/72CxReYpFf https://t.co/Xc0zN599gF
Bond Market Tests New Fed Chair with 2007‑High Yields
The 30-year Treasury yield hit 5.197% today — the highest since July 2007. Kevin Warsh gets sworn in as Fed Chair on Friday. That's not a coincidence. The bond market is testing him before he gets the keys. 🧵
30‑Year Treasury Yields Hit 20‑Year High on Inflation
Bloomberg: "Yields on the US Treasury’s longest-dated bond rose to the highest level in almost two decades as investor concerns mount that accelerating inflation will force central bankers to raise interest rates." #economy #markets #bonds
Recent Grads Now Face Higher Unemployment Than Overall Workforce
For 30+ years, recent college grads had lower unemployment than the broader workforce. That reversed in the 2020s. Today, recent grads are at 5.6% vs. all workers at 4.2%. My @morningjoe Chart:
ADP Reports Record 42.25k Weekly Hires
ADP weekly employment - new high at 42.25k/wk for the four weeks ending May 2 https://t.co/NGJuGoUAi8
Key Takeaways From a Week of Economic News
Feeling overwhelmed by the constant churn of economic news and data? @AliVelshi and I discussed what you really need to know from a pretty full week. Catch up here: https://t.co/OOawRebatN
Higher‑for‑Longer Rates Shatter Goldilocks Bond Outlook
Inflation came in hot, and the bond market officially lost its cool. 📈🔥 Yields spiked, rate cut bets got pushed back, and the "Goldilocks" narrative took a hit. Higher-for-longer is the new normal. BondMarket
Bond Market Sends Mixed Signals on the Economy
Thread starter: the bond market is telling two stories. Story 1 — 10Y yield at 4.59% says monetary policy is restrictive and term premium is back. Story 2 — HY credit OAS at 276 bps says default risk is muted...
Record Equities Drive Metals, Crypto Amid Inflation
Record Equities Are the Key Difference vs. 2008 The latest consumer price index reading of 3.8% is above the effective federal funds rate, a pattern last seen before the Great Recession. My graphic shows a similar CPI-fed funds trajectory, recovering from...
US Rates Rise, Greenback Gains as Economy Re‑accelerates
Week Ahead: Rising US Rates Underpin Greenback: The US economy appears to be re-accelerating here in Q2 after nearly grinding to a halt in Q1 (0.5% annualized pace). April US CPI and PPI were more elevated than expected. The anticipated...
Massive Treasury Sale Sparks Yield Spike, Fed Lags
US Government Sold $691 Billion of Treasury Securities this Week, 10-Year Yield Spikes to 4.6%, 30-Year Yield to 5.12% as 2nd Wave of Inflation Takes Off. The Fed is “behind the curve,” and the bond market is getting nervous https://t.co/ibFFTlMODv https://t.co/K9WhKU6pvt
Recent Grads Face 5.6% Unemployment, Above National Average
JUST IN: Unemployment rate for recent college graduates hits 5.6%, higher than the national average
Consumer Sentiment Hits 75-Year Low, Partisanship Skews Surveys
Consumer sentiment is near a 75-year low. But increasingly, these surveys may be measuring partisanship as much as economics. In other words, they may be asking “Do you like the president?” as much as “Do you like the economy?” https://t.co/jsDldxN9Hw
PCE Inflation Set to Hit 3.7%—Hottest Since 2023
🔥A post mortem on the inflation data this week and what it means for the Fed ‘s target PCE measure. The energy prices are hot and to be expected. The components of CPI, PPI and import prices that feed directly...
10y10y Yield Tops 2022, Signaling
The US' 10y10y forward Treasury yield (red) has just gone above its highest level in 2022, when we were dealing with massive global supply disruptions due to the COVID recovery. We're in a global debt overhang and the bill is...
Energy Crisis Threatens Inflation, Rate Cuts, Yields Near 5%
The risk to this rosy scenario remains a prolonged energy crisis that feeds through the broader economy via elevated structural inflation, which in turn could undermine the Treasury-Fed’s strategy of dropping short rates, while driving bond yields into the danger...
Inversion Signals Recession, yet Fed‑driven, Not Deflationary
10Y Treasury Yield−3M Treasury Bill Yield A deep inversion followed by re-steepening has historically been one of the best recession warning signals. But this cycle was driven primarily by extreme short-rate tightening from the Fed, not by a collapse in long-term inflation...
Job Growth Fuels Retail Gains Amid Low Unemployment
Consumer continues to consume: Retail sales .5% vs .4% X and ex-auto .7% vs .4% X. It's all about labor - with another week of strong jobless claims - lowest since Jan 2024 at 204K 4 wk moving...
Initial Jobless Claims Rise to 211k, Slightly Above Forecast
"In the week ending May 9, the advance figure for seasonally adjusted initial claims was 211,000, an increase of 12,000 from the previous week's revised level. The previous week's level was revised down by 1,000 from 200,000 to 199,000." Slightly...
Long‑term Bond Yields Hit 2008 Highs, Inflation Fight Drags On
Average yields on long-dated government bonds have reached their highest levels since 2008, h/t @DRBCurtis "The last mile of fighting inflation is a marathon rather than a sprint...there are a lot of upward pressures on rates across the curve:" Apollo's...
Weak PPI, Hot CPI Push Fed Hike Odds, BTC Holds
The macro just broke. April PPI printed +6% YoY and +1.4% MoM — a fivefold miss vs the 0.5% consensus, the worst print since 2022. Combined with Tuesday's hot CPI at 3.8%, markets are now pricing a non-trivial chance the...
Fed Quietly Resumed QE, Adding $200B to Balance Sheet
An under appreciated regime change is that the Federal Reserve quietly restarted Quantitative Easing (QE) in December by expanding its balance sheet. The Fed accumulates bonds, soaking up bonds that would otherwise go to the open market reducing money supply. ~$200B increase...
Owner's Rent Index Surges 7% Amid Survey Uncertainty
One component of CPI is owner's equivalent rent. It shot up at an almost 7% annualized rate in the most recent report. The last time it came in so hot it's because interest rates were near 0%. The problem is it's...
U.S. Job Market Remains Inflationary as Wage Growth Accelerates
New at THE OVERSHOOT: The U.S. Job Market is (Still) Inflationary https://t.co/KpTd2X6fNG Wage growth is now accelerating slightly, supporting the quickening of "supercore" service price increases. Plus: more on the health care wage slowdown mystery. https://t.co/pBeutaTLhh
Delinquency Rates Hit Record Highs Across Major Loans
13.1% of credit card balances in the US are now 90+ days delinquent, the highest since 2011. 10.3% of student loan balances are now 90+ days delinquent, the highest since 2020. 5.6% of auto loan balances are now 90+ days delinquent, the...
Rare 10‑Year Yield Dip Predicts Stock Gains
10-YEAR US TREASURY HITS 4.5% FOR THE FIRST TIME IN 302 DAYS How rare is this? Well, since 1970, this is only the third time that the 10y has been below 4.5% for at least 200 trading days before going back...
Jobless Claims Hit 56-Year Low, Tied Record
The second-to-last jobless claims report was tied for the lowest in the last 56 years. (That's in honor of @OddStats returning)
Bond Market Stays Silent Despite Scorching US PPI
One of the notable developments this morning is the "dog that didn't bark": the lack of a significant bond market reaction to a scorching US PPI print. The move in government bond yields has been de minimis, as shown in the...
Core PPI Spikes; Money Supply Growth Remains Hidden Driver
Largest year over year increase in Core PPI in five years. That excludes food, energy, and trade. You know what they can’t strip out? Money supply growth. https://t.co/WYpCOQS2Vv H/t @lisaabramowicz1 https://t.co/BpYJcanI4S
Hot PPI Crushes Rate‑cut Bets, Markets Slide
Hot PPI just killed the rate cut trade 🔥 Producer prices came in 3x hotter than expected while CPI was only a mild bump. Translation: producers are getting squeezed and struggling to pass costs to consumers. Bullish dollar. Bearish gold. Fed sitting...
Inflation Climbs, but Wage Demands Stay Muted
CPI just hit 3.8%, highest since May 2023. But wage pressures are sitting near record lows and workers aren't demanding raises like they did in 2021-22. 🔒 Members-Only https://t.co/XgCJN3pPRh
Debt Surge to $232T Threatens Faster Interest Rate Rise
"...somewhere between a federal debt of today’s $31 trillion and the 30-year projected level of $232 trillion, a brutal cycle of rising interest rates followed by even faster-rising debt will likely be unleashed. Responsible lawmakers and taxpayers should not want...