Bad inflation news is worse than expected
The Commerce Department reported this morning that the core Personal Consumption Expenditures price index, that is after stripping out volatile food and energy prices, climbed 2.8% in February from a year earlier. That was a faster pace than in January. On a monthly...Buckle those seat belts–it’s going to be a bumpy two weeks
I see the beginning of two weeks of extraordinary volatility. Look what’s on deck. On Tuesday, March 4, President Donald Trump will give his first joint address to Congress–it’s not officially a State of the Union address because newly elected presidents don’t...
Finally some good news on inflation due this week
Economists expect the Federal Reserve’s preferred inflation measure–due Friday–to cool to the slowest pace since June. But while I think markets will cheer, it’s too soon to look for any change from the Federal Reserve on interest rate cuts. That will have...
Please watch my new YouTube video: The Fed is caught between a rock and a hard place
Today’s video: the Fed is between a rock and a hard place. Inflation has been stuck around 2.8% and the Fed would like to get it down to 2%. In January, the Fed paused on interest rates but Wall Street still hopes for two cuts in 2025. The March 19 meeting will...
Paul Krugman puts some numbers on the effects of Trump’s tariffs
Assuming that conventional economics still has some validity and that economic history has some predictive value, Paul Krugman, who won his 2008 Nobel-prize in economics for his work on international trading patterns, has put some numbers on the likely effects of the...
Big market reaction on a tiny move in CPI inflation
As of noon New York time today, January 15, the Standard & Poor’s 500 was ahead 1.30%. The NASDAQ Composite and the small-cap Russell 2000 were both up 1.80% on the session. Today’s big moves come on relatively minor changes in inflation trends in this...
It’s a pivotal week ahead for stocks
In the coming week I expect more inflation turmoil and the beginning of a challenging earnings season. After last week’s jobs surprise and Friday’s selling on the surprising strong showing on employment and the U.S. economy, the Wednesday, January 15 release of the...
It’s CPI inflation time again this week
All eyes will be on the Consumer Price Index inflation report for November due out on the morning of Wednesday, December 11. It’s the last big inflation data dump before the Federal Reserve meets on December 18. In October, the Consumer Price Index for All Urban...
More evidence that the inflation rate is stuck
Yesterday, Wednesday, November 27, the report from the Bureau of Economic Analysis showed that the Personal Consumption Expenditures index, the Federal Reserve’s preferred inflation measure, had continued the stall that began in May. In October the headline number...
Watch my new YouTube video: Fed one and done in December?
Today’s video is Fed One and Done in December? On November 13, the CPI inflation numbers showed inflation ticking up slightly, but the market still believes the Fed will cut rates again in December. On November 13, the CME FedWatch tool had it at 83% odds...
The Fed faces an impossible task in 2025
There’s no reason to believe that President-elect Donald Trump isn’t serious about pushing three of his biggest policy ideas through in the first 100 days of his administration in 2025. Susie Wiles, his pick for White House chief of staff, has said, “Get it done in...
CPI inflation creeps higher in October; market still forecasts December interest rate cut
Inflation ticked up slightly on an annual basis in October, the latest evidence that further reductions in inflation are getting hard to achieve. The Consumer Price Index climbed 2.6% from a year earlier, up from September’s 2.4% annual rate, the Bureau of Labor...
Wall Street and the bond market see fewer interest rate cuts in 2025 from the Fed
Look out for more volatility in the bond market. BlackRock, JPMorgan Chase, and TCW Group have all warned that the bumpy ride is likely far from over. But also expect that the big overall trend for 2024 of rising bond prices and falling yields on hopes for aggressive...
It’s a BIG week for BIG TECH earnings reports
Expect Big Tech earnings reports and more earnings reports this week.. All capped on Friday with the October jobs report, the last one before the November 7 meeting of the Federal Reserve on interest rates. (Which means that the Fed will be in its blackout period...
Wait! No soft landing! No more rate cuts! The market freaks out again!
It’s back! Fear that the economy is so strong that the Federal Reserve won’t cut interest rates as sharply or as quickly as expected. In the last few days, following on a surprisingly strong September jobs report, the market has gone from giving 50/50 odds to a second...
All-items CPI inflation falls; core inflation above expectations
Definitely a mixed bag in the Consumer Price Index inflation report for August released yesterday. I think the mixed results lower the odds of an aggressive 50 basis point interest rate cut at next week’s Federal Reserve meeting. But they keep the odds of a...
CPI inflation report this week is one last barrier to September interest rate cut
Expect a final inflation test this week before the Federal Reserve meets on September 18. Unless there’s a huge surprise in the Wednesday, August 14, CPI report, the Fed will cut interest rates for the first time at that meeting. The Federal Reserve Bank of...
McDonald’s sales drop for first time in four years–this is what a McDonald’s economy looks like
Global sales at McDonald’s (MCD) store locations open at least a year fell 1% in the April-June period, the first decline since the final quarter of 2020, the company reported in announcing second quarter earnings. In the United States, sales fell nearly 1%....
It’s getting to look a lot like September–for the Fed’s first interest rate cut
The U.S. economy added 206,000 jobs in June, the Bureau of Labor Statistics reported today, July 5. That was above the median forecast of 190,000 new jobs in a Bloomberg survey of economists. But even though the June number came in above expectations, the overall...
And now they tell us: A day before the jobs report the BLS tells us that the employment numbers have been wrong
The Federal Reserve has been telling us over and over again that its decision on cutting interest rates depends on the data. Among other things, the Fed wants to see a steady slowdown in the employment market reflected in the data before it cuts interest rates. But...
Powell says Slow–as market waits for Wednesday CPI inflation report
Granted that the remarks weren’t delivered at the most high profile venue–a panel discussion at the Foreign Bankers Association meeting in Amsterdam–but I read Federal Reserve chairmen Jerome Powell as saying that the U.S.central bank might hold interest...
The jobs data doesn’t tell us what the Fed is thinking about rates and inflation–so the market guesses
The U.S. economy added 175,000 jobs in April, the Bureau of Labor Statistics announced on Friday. That was the smallest number monthly new jobs in six months. The unemployment rate ticked up to 3.9%. And traders tried once again, to get ahead of the data. Concluding...
The Fed walks a very, very fine line on inflation and interest rate cuts
On Wednesday, May 1, the Federal Reserve decided NOT to cut interest rates at its May 1 meeting. That was the decision expected by the financial markets. And Federal Reserve chair Jerome Powell tried his best to keep traders from speculating that the Fed would...
Now it’s one interest rate cut and not until December
How views on interest rates have changed since the start of 2024. Then, in January, the consensus view called for as many as six interest rate cuts from the Federal Reserve in 2024 for a total of 150 basis points in cuts to the Fed’s benchmark interest rate. Today,...Producer price index continues bond market freak out
So why was this so important today? So important that the yield on the 10-year Treasury rose another 3 basis points to 4.58%. The Producer Price Index for final demand rose 0.2% in March, seasonally adjusted, the Bureau of Labor Statistics reported today. Final demand...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...
Inflation, AI, and auto news headline a short market week
Lots of important news on inflation and on the auto sectors and from Adobe on developments in AI this week. With some strange wrinkles in timing due to the short Good Friday week. Inflation first, because that’s where timing is so strange. At 8:30 a.m. New York time...
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...Jim’s Daily Email Alerts:
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