Hot CPI inflation number takes June interest rate cut off the table
In March the Consumer Price Index inflation rate rose more than expected by economists for a third straight month, the Bureau of Labor Statistics reported this morning. That looks to the market today, and to me, like it takes an initial interest rate cut off the table...Stronger than expected March jobs report nudges odds against June rate cut slightly
The U.S. economy added 303,000 jobs last month. That was far more than than the 192,000 expected by economists.The unemployment rate dipped to 3.8%. For today at least the stock market sees the report as “The glass is half full.” Yes, a stronger than expected labor...
About those inflation worries yesterday? Today’s ISM services report says “Never mind.”
The Institute for Supply Management’s composite index of services fell 1.2 points to 51.4 a four-year low. The drop in the report released today, April 3, was the second month in a row. The services report came a day after the manufacturing sector report showed costs...
No surprise! on interest rates from the Federal Reserve today
The Federal Reserve unanimously voted to leave the benchmark Fed Funds rate in a range of 5.25% to 5.5%, the highest since 2001, for a fifth straight meeting. They left their projections in the quarterly Dot Plot for the Fed Funds rate by the end of 2024 at 4.6%. That...
No Fed drama on Wednesday but still the chance for a market-moving disappointment
There’s plenty of room for disappointment in Wednesday’s Dot Plot projections from the Federal Reserve. Economists surveyed by Bloomberg were still expecting the Federal Reserve to cut interest rates three or more times in 2024 with the first cut coming in June. (To...
Hotter than expected Wholesale Price Inflation adds to inflation/interest rate fears
It’s becoming a refrain. Today another inflation measure came in hotter than expected. Which is the problem. It’s har to ignore the possibility that inflation has stopped its steady decline and its recent months has started to move up again. Is there a problem here...
Why next week’s Dot Plot from the Fed is more important than ever after a hot inflation report
There’s not much question of what the Federal Reserve will do at its March 20 meeting. The odds–99% on the CME Fed Watch Tool–are that the Fed will do nothing and leave interest rates at the current 5.25%-5.50% benchmark. But that day the Fed will also...
Core CPI inflation disappoints again for February
Core CPI inflation came in hotter than expected in February for a second straight month. The core Consumer Price Index, which excludes food and energy prices, increased 0.4% from January, the Bureau of Labor Statistics reported today. The year over year inflation rate...This week it’s a battle between AI and inflation
This week I expect a battle for the market’s attention between the continued AI monster momentum story and the macro story on inflation and interest rates. Will the extreme AI momentum that ended the week–with Nvidia (NVDA) up 4.0%, and Advanced Micro Devices...
Inflation, especially services inflation, looks sticky: PCE inflation up a fast 0.4% month to month in January
The headline, all-items Personal Consumption Expenditures price index, the Federal Reserve’s preferred inflation measure, climbed at a 2.4% year over year rate in January. That was in line with what economists had forecast and down from the 2.6% annual rate in...
Big deal inflation report on Thursday could be bad news for stocks
On Thursday the financial markets get a new monthly PCE inflation report. The PCE, Personal Consumption Expenditures index, is the Federal Reserve’s favorite inflation measure. And Thursday’s report on January inflation could be bad news for the financial markets, ...
Good but disappointing news on CPI inflation for January
Headline, all-items Consumer Price Index (CPI) inflation fell again in January, but not by as much as economists had projected before this morning’s report from the Bureau of Labor Statistics. In January prices rose at 3.1% year-over-year. That’s a slower increase...
Federal Reserve disappoints, comes close to taking a March cut in interest rates off the table
The Federal Reserve maintained its benchmark interest rate on Wednesday in a range of 5.25%-5.50%–as the financial markets expected. But the central bank pushed back more strongly on than financial marks hoped on a March 20 schedule for the first cut in rates....
Big news for the week ahead isn’t the Fed meeting but Apple earnings report
Yes, it’s a Federal Reserve meeting week, but I expect Apple’s (AAPL) earnings report for its December quarter to be the big event of the week. With the potential to move the tech sector and the market. Fed first. The Fed’s interest rate setting body, the Open Market...
Not so fast–the rethink of when the Fed will start to cut rates continues to hit stock and bond prices
Last month, the bond market was almost fully pricing the first interest rate cuts from the Federal Reserve in March. Now, though the odds for a 25 basis point cut in that month are down to more like 50/50. Today, January 17, the yield on the 10-year Treasury rose...
Is the debt market ignoring the coming wave of bond supply?
Right now all that the bond market and indeed all the financial markets care about is when will the Federal Reserve begin to cut interest rates. The consensus is that sometime relatively soon–March or more likely June–the Fed will begin to deliver interest...
Core CPI inflation numbers disappoint for November, illustrate why the Fed won’t rush to cut rates
If you follow the headline numbers (what’s known as All Urban Consumers) for the Consumer Price Index (CPI), you’d say, “See inflation continues to fall; the Federal Reserve will cut rates quickly in 2024.” But you’d be following the...
For this week’s Fed meeting, watch the central bank’s Dot Plots and not what it says
Well now, let’s see. What could the financial markets be thinking about this week? The Yankees’trade for Juan Soto? Who will be the next Speaker of the House when Republicans force Mike Johnson out? The link between Mexican avocados and the country’s...
Some in the bond market are saying the bond rally has been too far, too fast
I’m hearing some chatter that says bond traders and analysts are stepping aside from the bond rally. Or are planning to do so. Their argument is that the move has been too far, too fast. Specifically, I’ve heard talk of selling if the yield on the 10-year...
Powell tries to temper Wall Street belief in rapid interest rate cuts but no one is listening
It wasn’t the most forceful pushback it’s true, but the financial markets paid attention to Federal Reserve Chair Jerome Powell’s attempt to say interest rate cuts aren’t just around the corner for about two minutes. And then the rally based on...Economists project that the rate at which inflation is falling will slow–does the Fed care?
The pace of improvement in the U.S. inflation rate is set to slow in the coming year. According to the economists surveyed by Bloomberg in its latest monthly outing, the core personal consumption expenditures (PCE) price index-—-the Federal Reserve’s preferred measure...
Nothing new in Fed’s November 1 minutes: Careful on rates
Federal Reserve officials at their November 1 meeting were agreed on a strategy to “proceed carefully” on future interest-rate moves and base any further tightening on progress toward their inflation goal. “All participants agreed that the committee was in a position...
Will Tuesday’s rally continue? 3 things I’m watching
One day fluke? The next step in an end of year Santa Claus rally? Huge bear market trap? The beginning of the next big Bull market? Tough questions to answer but important for figuring out an investment strategy for NOW. So here are three things that I’ll be...
Want to know where this rally is headed? Watch Tuesday’s CPI inflation report
I expect Tuesday’s Consumer Price Index report for October to be critical in determining whether the Christmas rally narrative can be sustained. Right now, short-term, stocks look like they want to move higher. That trend is built on a narrative that says, the...
Are financial markets getting interest rates wrong again?
The financial markets continue to swing from extreme to extreme in sentiment. The markets were wrong at the beginning of last week. It’s likely the markets are wrong again. Last week before a weaker jobs number for October and a slightly smaller than expected...
All it took was a weak jobs report and stocks are off to the races
The U.S. economy added “only” 150,000 jobs in October, the Bureau of Labor Statistics announced this morning, November 3. Economists had projected that the economy would add 180,000 jobs for the month. The unemployment rate climbed slightly to 3.9% from...
Federal Reserve holds rates steady as expected, so why did 10-year yields fall 18 basis points?
Certainly, it wasn’t any surprise that at today’s meeting the Federal Reserve decided to keep its policy rate steady at 5.25% to 5.50%. Going into the meeting the CME FedWatch tool put the odds of the Fed standing pat on rates at close to 100%. So why then...
The “other” big interest rate news tomorrow: How big will the Treasury’s bond auctions be?
Yeah, yeah, yeah. The Federal Reserve will announce its interest rate decision on Wednesday–the market currently expects no change to policy interest rates. But I’d argue that the bigger news on internet rates for the day will come when the Treasury...
PCE, the Fed’s favorite inflation measure, comes in unexpectedly hot in September
The Personal Consumption Expenditures index, the Federal Reserve’s preferred measure of inflation, accelerated to a four-month high in September. The core Personal Consumption Expenditures index, which strips out volatile food and energy prices, rose 0.3% in September...Jim’s Daily Email Alerts:
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