PPI Goods = -1.5% PPI Services = 2.1% PPI FD = .9% PPI translation to the consumer: PPI FD Personal Consumption = 1.04% PPI FD Personal Consumption less Food and Energy = 2.2% PPI FD Personal Consumption less Food, Energy and Trade Services = 2.9% PPI FD Personal Consumption less Food, Energy and Distributive Services = 3.4% We continue to [...]
"After a pause in September, the LEI resumed signaling recession in October." LEI signaling a shallow recession. The index is down 3.3% in the last 3 months and -.8% in October. I hate to compare cycles, but the machine does and there are certainly similarities. The similarities became apparent with the release of CPI last week. In June of 2006 [...]
If we look at inflation on a year over year basis, the data series is smooth and it is coming down. The rate of decent has slowed, but that's ok, the world doesn't work in perfectly smooth arcs and waves. The month over month annualized rate is a shorter term (very volatile) rate. As such, it will lead when there [...]
The economy was in danger of running hot, too hot they all said. In order to stay ahead of such inflation potential, as central bankers saw it, first it would be necessary to wind down quantitative easing. Taper then terminate. After that, rate hikes.Hawks buzzing around everywhere.But Mario Draghi’s ECB had a problem. The inflationary pressures were there, he reasoned, [...]
The Federal Reserve left interest rates at 0 after their 2 day policy meeting this week. Less concerning, they lowered the forecast for future rates. We have red and green street lights. Why? Because society finds it beneficial that people using our streets aren't speeding through an intersection from both directions at the same time. We have laws against stealing. Why? [...]
For the past 7 years we've listened to the so-called "experts" bemoan the "extraordinary" Fed policies. They called them dangerous, untested, experimental. Now all of a sudden there is a change of heart? Don't raise the rate?? It is too risky?? It would be irresponsible and dangerous?? The markets and the economy couldn't possibly bear an interest rate above 1/8 of a percent?? The [...]
Yesterday the Fed conducted the first test of its newly-minted Fixed-Rate Reverse Repo program. The auction drew $11.809 billion in bids (all accepted, thus the “fixed rate” rather than “fixed allotment”) at 0.01%. Since this is a reverse repo, the Fed is “borrowing” cash from the system, collateralized by the UST’s in its SOMA holdings. Most commentary continues to focus [...]
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