201705.25
0
1

Almost Certain

It doesn’t appear as if the OPEC decision went as the oil ministers might have hoped. Agreeing to a nine-month extension, more than the usual six months, it was still less than the whispered year that had been rumored and seemingly supported as late as yesterday. Still, Saudi Energy Minister Khalid al-Falih was encouraged. We…

201705.24
1
1

There Is Clarity In Oil’s Increasingly Cloudy Forecast

Problems aren’t supposed to be always intractable, are they? It has gone on so long that maybe long ago memories of minor adjustments are a bit fuzzy, but seemingly no matter what over the last decade every that issue arises and is met by the usual, standard efforts, is instead of being solved by them…

201705.19
0
4

A Lousy State

I don’t pay much attention to the 2 year part of the UST curve because I think it is susceptible to information spoilage, distortions that aren’t strictly related to what a “risk-free” 2s should tell us. But as my colleague Joe Calhoun often reminds me, just because I don’t think it as important doesn’t mean…

201705.16
1
1

Good Month For Industrial Production, But Serious Questions Remain

Industrial Production rose sharply in April 2017, up nearly 1% month-over-month (seasonally-adjusted). It was the largest single month increase since February 2014 during the depths of the Polar Vortex. Steady contributions from the oil sector as well as a rebound (of sorts) in Motor Vehicle Assemblies added to the gains. Year-over-year, IP was up just…

201705.15
4
2

Staying Stuck

The rebound in commodity prices is not difficult to understand, perhaps even sympathize with. With everything so depressed early last year, if it turned out to be no big deal in the end then there was a killing to be made. That’s what markets are supposed to do, entice those with liquidity to buy when…

201705.12
2
3

Inflation Is Oil, But Inflation Is Much More Than Consumer Prices

The average annual change in the WTI benchmark price was in April about 25%. That was still a sizable increase year-over-year, and just marginally less than March’s average of 33%. For calculated inflation rates, it represents the last of the base effects that have to this point made it appear as if economic improvement was…

201705.10
1
4

China Inflation Now, Too

We can add China to the list of locations where the near euphoria about inflation rates is rapidly falling apart. This is an important blow, as the Chinese economy has been counted on to lead the world out of this slump if through nothing other than its own sheer recklessness. “Stimulus” was all the rage…

201705.10
3
2

Just Not Down As Much

It is one of those things that will never be stated outright, nor does there exist the kind of unassailable proof that would convict in any legal sense. Regardless, monetary officials here and elsewhere are clearly trying to have it both ways. They know very well what is driving inflation rates upward of late, and…

201705.09
2
2

More And More An Inventory Story

Wholesale sales were up 8.3% in March 2017 unadjusted year-over-year. Like other accounts, however, the seasonally adjusted series was not impressed. On an adjusted basis, sales were flat month-over-month, just $50 million more in March than February. It isn’t clear what the problem might be, as the only calendar aberration is Easter that fell in…

201705.01
5
2

The Irony of Stable Inflation

In February 2000, the FOMC quietly switched from the CPI to the PCE Deflator as its standard for inflation measurement. There were various technical reasons for doing so, including the CPI’s employment of a geometric mean basis (which was in 2015 finally altered to a Constant Elasticity of Substitution formula). But it was one phrase…