Inflation holds steady at annual 1.7% rate
The Consumer Price Index rose 0.1% in July from June. CPI headline inflation is now running at a 1.7% annual rate, below the Federal Reserve’s target of 2% inflation. The core inflation rate, which excludes food and energy prices, rose 0.1% in July and is also...
Inflation at the wholesale level edges up slightly
A day after Federal Reserve chair Janet Yellen boosted markets with her worries about slow inflation, the Bureau of Labor Statistics released numbers on inflation at the producer level–otherwise known as wholesale inflation–that showed inflation is weak...
Yellen doesn’t say much but bond market likes what it thinks it heard
It’s not much to hang a rally on, but the Treasury and stock markets moved up after Fed chair Janet Yellen told the House Financial Services Committee today that “the federal funds rate may not have to rise all that much further to get to a neutral policy...
Today’s positive economic data help stabilize stocks
Lots of economic data this morning. None fall into the earthshaking category. But the general picture is positive. And that has helped stabilize stocks in New York. Â Economic Summary: Personal Income outpaces spending in May, Chicago PMI well above expectations On the...
A Fed interest rate increase in June? Consumer spending says, Yes; Inflation slowdown says, Maybe
Consumer spending picked up in April, signaling that growth in the economy as a whole is headed for a rebound after a weak first quarter. Purchases increased by 0.4% in April, matching projections from economists surveyed by Bloomberg, after a 0.3% gain in March, the...
Fed has June 14 interest rate increase in its crosshairs
The Federal Reserve is certainly behaving like it will raise interest rates another 25 basis points at the June 14 meeting of the Open Market Committee. The U.S. central bank raised its target for the Fed funds rate to 0.75%-1% at its March meeting. The financial...
Watch out for volatility around Friday’s CPI inflation report
Friday’s Consumer Price Index release will have extraordinary power. Maybe even enough to move the financial markets. Ordinarily, the monthly report of inflation in the Consumer Price Index isn’t a market-shaking event. The CPI isn’t the inflation...
Financial markets take-away from today’s Fed minutes: Shrinking the balance sheet on tap in 2017
Amidst all the talk about inflation and inflation targets, and the strength of the labor market, and the role of stock prices in monetary policy, what the financial markets fastened on in the minutes from the Federal Reserve’s March minutes, released this...
No sign U.S. economic growth accelerating in today’s income report
Personal income in February rose by 0.4% month over month in February, the Commerce Department reported today. That matched economists’ expectations. But personal spending notched only a small gain of 0.1%, below expectations for a 0.2% increase. The Personal...
Winners from the Fed’s move on Wednesday
The jump in the price of gold and the even huger spike in the prices of gold mining stocks tells us something really important about how the financial markets see the Federal Reserve’s action and rhetoric on Wednesday, March 15. On Wednesday gold for April...
Fed raises interest rates a quarter of a percentage point and Yellen then talks markets in off the ledge
As is frequently the case, it’s not so much what the Federal Reserve did today as what Fed chair Janet Yellen said. At its meeting today the Fed’s Open Market Committee raised the central bank’s benchmark short-term interest rate 25 basis points to a...
Here’s what I’ve been writing about on my paid sites: How to tell when the bond bear market is finally at the door
Let me share a post that I put up last night on my paid sites about when the great bull market in bonds will finally turn into the great bear market in bonds. Yes, that’s sites. Plural. I’ve been busy building a second site, JugglingWithKnives.com, that...
Markets say the European Central Bank is about a year behind the Fed in raising interest rates
Ahead of Thursday’s meeting of the European Central Bank futures markets have started to raise the odds that the bank will start raising its benchmark deposit interest rate beginning in April 2018. The market was putting the odds of an April increase at 20% last...
On Friday the Fed will make it clear what it thought of tonight’s speech by President Trump
President Donald Trump speaks tonight to a joint session of Congress. The expectation is that he will present–in general terms–a budget with a big increase for military spending and cuts to programs at departments such as the Environmental Protection...Inflation continues to climb, CPI says
Inflation, as measured by the Consumer Price Index, Â rose in January by a larger than forecast 0.6%. Â That’s a pickup from the 0.3% rise in December and brings the 12-month inflation rate to 2.5%, the highest since March 2012. The core CPI, which excludes...
Shiller says Dow 20,000 isn’t important and entire rally since 2000 is an illusion
Count on Robert Shiller, the author of Irrational Exuberance and the winner of the Nobel prize in economics in 2013, to rain on the Dow 20,000 parade. Hs latest piece–I read it on The Guardian...
European Central Bank stands pat; Draghi urges Germany to have patience
If it sounds a little simplistic to you as monetary policy, that may be because it is. Confronted with German criticism of the asset buying stimulus program at the European Central Bank and German fears of resurgent inflation, bank president Mario Draghi advised...
Inflation creeps higher leaving Fed on track to raise interest rates in June
Granted the Consumer Price Index isn’t the inflation index that the Federal Reserve prefers but until the next release of that measure–the Personal Consumption Expenditures Price Index scheduled for January 30–the CPI is what we’ve got. In...
China’s inflation rate at the factory level surges to 5.5% annual pace in December
Sort of OK news and bad news on inflation out of China over night. The Consumer Price Index rose by just 2.1% year-over-year in December. Economists had been looking for inflation to increase by 2.2%. A slower than expected increase in the price of vegetables, a key...
The inflation squeeze on the European Central Bank just got tighter
In my macro look forward at 2017 “My-forecast-of-the-big-events-and-macro-trends-for-the-year-ahead-the-12-most-dangerous-months-of-2017/” I flagged the lose/lose decision facing the European Central Bank in the year ahead. The bank’s current policy...
U.S. economy shows 3.2% growth in third quarter ahead of Fed meeting on interest rates
The second revision to U.S. GDP growth in the third quarter was the charm. The U.S. economy grew at a 3.2% annualized rate in the the three months that ended in September, according to the Commerce Department. That was ahead of the 2.9% growth reported in the initial...
Global rout in bonds continues–new danger spot Japan
The rout in global bonds continued today. The yield on the 10-year U.S. Treasury climbed 7 basis points to 2.22% as of 3 p.m. New York time. That’s the highest level since January and comes after a jump of 37 basis points last week. Yields on the 10-year German...
Global bond markets decide Trump means more government spending, a big tax cut, bigger deficits, and higher inflation–and increased odds that the Fed will raise interest rates faster than expected just last week
Global bond markets fell to the tune of a more than $1 trillion loss this week after Donald Trump’s win in the U.S. presidential election. The market value of the Bank of America’s Global Broad Market Index, which tracks 24,000 bonds around the world, fell...
A new landscape for investors after a Trump victory–my guide from A-W (I can’t find an X,Y, or Z)
And to think that just yesterday I was scouting for an investment that would let me go long the Mexican peso and thinking of cutting back my exposure to biotechs. Not today. My thinking on both those potential investments has been turned upside down by Donald’s...
Selling my Treasury ETF because my scenario on global central bank policy was wrong
When I bought shares of the iShares 7-10 Year Treasury Bond ETF (IEF) back on June 28, 2016, it was in the belief that the Federal Reserve would raise interest rates (as early as September or as late as December) while other central banks remained committed to their...
Mild inflation numbers lead to mild market gains
The headline consumer price index, the government announced this morning, rose 0.3% in September. That follows on a 0.2% increase in August. The headline rate of inflation is now 1.5% year over year. That’s the highest rate of inflation for this number since...
Suddenly U.S. stocks seem vulnerable
It’s not like U.S. stocks didn’t have enough to worry about today. The bond market priced in the highest level of inflation expectations since May. Oil fell as Russia’s biggest producer Rosneft said it won’t cut output. Alcoa (AA), the company...
You can read today’s inflation data two ways–which will the Fed pick?
Hope you weren’t expecting this morning’s inflation data to tell you whether or not the Federal Reserve will raise interest rates at its December 14 meeting. (I believe that an interest rate increase at the Fed’s November 2 meeting is just about a...
Economy and financial markets point in different directions ahead of Wednesday’s Fed meeting
Pity the poor Federal Reserve. In making decisions about interest rates–in this case about whether or not to raise interest rates at its June, July or September meetings–it has to consider the condition of both the real economy and the financial markets. And right now...Jim’s Daily Email Alerts:
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