Inflation/Deflation
The January US CPI came in hotter than expected. Headline inflation accelerated to 0.5% m/m (3.0% y/y), and core to 0.4% m/m (3.3% y/y). Core goods and services inflation also moved higher, with the latter boosted by a sharp increase in car-insurance…
Some thoughts on this morning’s CPI report and its implications for the Fed and Treasury yields.
The January NFIB Small Business Optimism Index decreased more than expected to 102.8 from 105.1. After reaching near all-time highs in the wake of the election, expectations pulled back somewhat as uncertainty took center stage. The decline was…
The New York Fed’s Survey of Consumer Expectations’ 1-year and 3-year inflation expectations were unchanged in January. Five-year ahead expectations however increased, as did expectations for staples inflation, while spending expectations…
China’s January consumer prices rebounded to 0.5% y/y, and producer price deflation was unchanged at -2.3%. China’s first quarter data tends to be distorted by the Chinese New Year, as its variable dates shift consumption peaks around without a clear pattern.…
Our Emerging Market strategists published a follow-up piece to their Bessenomics note where they assess the new Treasury Secretary plan’s impact on markets. Lower interest rates are central to Bessenomics. The Trump administration is expected to pressure…
The preliminary February University of Michigan Consumer Sentiment Index missed estimates, falling to 67.8 from 71.1 in January. The decrease came from both expectations and the assessment of current conditions. Measures of 1-year and 5-10 year inflation…
Some thoughts on this morning's employment data and Treasury Secretary Bessent's recent attempts to talk down the 10-year Treasury yield.
The Bank of England cut its policy rate by 25 bps to 4.5%, with two members of the MPC voting to cut 50 bps instead. The BoE acknowledged “substantial progress on disinflation”, driven by a tight policy stance and stabilized inflation expectations. The dovish…
The January ISM Services missed estimates, decreasing to 52.8 from 54.0 in December. The move was driven by activity components, while employment and suppliers’ delivery times increased. Additionally, the prices paid measure decreased, reversing the…