The September jobs report poses a huge challenge for the Fed
What a difference an employment report makes. Before the September jobs report, released on Friday, October 2, the CME FedWatch Tool, which looks at the Fed Funds Futures market for its read on traders’ sentiment, was giving 70.9% odds of a 25 basis point interest...
A key Fed inflation argument is crumbling–and economic data later this week could take odds of an October interest rate increase higher
The inflation debate at the Federal Reserve has been whether supplyside shocks such as the closing of the Strait of Hormuz to oil and petrochemical tankers should be treated as one-off events. And whether the Federal Reserve should look through these supply side...
Treasury Secretary Bessent tries to jawbone the Fed
Intervening in the Treasury market worked so well last time, why not try it again? On August 19, Treasury Secretary Scott Bessent announced an enlarged long-dated Treasury buyback program. The policy was to at least double the maximum repurchase size—from $2 billion...
Is a Fed bent on interest rate increases good or bad for bonds?
Which will it be this week? After the Federal Reserve raised its benchmark interest rate 25 basis points on Wednesday, Treasury bonds rallied with the yield on the 10-year Treasury falling from 5.02% on September 16 to 4.93% on September 17. (Remember when bond prices...
After the Fed’s hike, the question is how many and for how long? Here’s a discouraging data point from Costco
Costco has raised the price of motor oil sold under its exclusive private-label as well as limited how much of it customers can buy weekly as oil prices climb yet again. And while the company hasn’t said how long the price increase might last, supply forecasts say...
The Fed decides to hang together; goes for credibility on inflation if they can keep it
Reading Wednesday’s decision by the Federal Reserve to raise its benchmark short-term interest rates by 25 basis points to a target range of 3.75% to 4.00%, I’ reminded of two quotes attributed to Ben Franklin. First, is his famous argument for why the colonies should...
Hotter than expected CPI inflation number convinces the market that Fed will raise interest rates next week
Odds of a 25 basis point increase in the Federal Reserve’s benchmark short term interest rate, at the Fed’s September 16 meeting, rose to 86.7% from 72.4% yesterday, according to the CME FedWatch Tool after a key gauge of U.S. consumer prices rose by more than...
Friday’s CPI inflation report making investors nervous
Want to debate which is putting more pressure on stocks, higher oil prices because of the Iran war or fears that Friday’s CPI inflation report will push the Federal Reserve into hikng interest rates? Today Brent crude settled around $98 a barrel, and kept climbing...
The role of toilet paper: Tariffs, inflation, and the K-shaped economy
The role of toilet paper: Tariffs, inflation, and the K-shaped economy Tariffs are often said to be a tax on consumers who pay higher prices for anything imported into the U.S. True enough. But we know not all taxes are equal. Some, for example, are decidedly...
Friday’s jobs report won’t solve Fed interest rate/inflation puzzle
Friday’sjob report for August will be just strong enough and just weak enough to leave the Federal Reserve trapped in its current indecision on interest rates. Economists estimate the monthly employment report from the Bureau of Labor Statistics on Friday will show a...Kevin Warsh has a Fed problem: 3 on 1 wasn’t fair and now it looks like it’s 4 against 1
At the last meeting of the Federal Reserve’S Open Market Committee three members of the interest rate setting body voted against the Fed’s decision to hold interest rates steady. Those dissenters wanted to raise interest rates to fight inflation still running...
What’s worse for the Fed than too much data? Right now, it’s no data at all
This is the beginning of an extraordinary two-week data drought, just as the Federal Reserve stresses that changes in interest rates will be “data dependent.” Financial markets want to know how fast inflation is growing. We do get the next CPI inflation report (for...
Good news on June CPI inflation–but how long does it last?
American consumers got some inflation relief in June after months of soaring prices. The all-items Consumer Price Index (CPI) was up 3.5% in June from a year earlier, the Bureau of Labor Statistics said on Tuesday. That represented a cool-down from May, when annual...
PCE inflation looks likely to move up in Thursdays’ report
Expect bad news from Thursday’s release of the PCE inflation number. Forecasters expect the personal consumption expenditures price index, the Fed’d preferred inflation index, to show acceleration on both a monthly and year-over-year basis in May. Kevin Warsh, who led...
CPI inflation for May is bad news–4.2% headed for 4.5%
Inflation crossed the 4% annual rate for the first time in three years in May. CPI inflation reached an annual rate of 4.2% in May, the highest in three years and up from a 3.8% rate in April, according to the Consumer Price Index released Wednesday by the U.S. Bureau...
Wage growth in May didn’t keep up with inflation rate
Average hourly wage growth over the past year slowed slightly in May, rising 3.4% over the past 12 months to $37.53 an hour. This marks the slowest pace since 2021. After years of real gains, wage growth is no longer keeping up with inflation, at 3.8%, adding new...
PCE core inflation climbed at a 3.3% rate in April
Personal Consumption Expenditures Price Index, the Federal Reserve’s preferred inflation measure, rose at a 3.8% year-over-year basis in April, the Bureau of Economic Analysis reported today. Core PCE inflation advances 3.3% on year-over-year basis. The Fed’s...
A week of inflation news ahead–and it’s likely to be bad
Important inflation news on Thursday and the numbers for the Personal Consumption Expenditures index (PCE) are likely to continue the recent trend of bad inflation news. The headline PCE, the Federal Reserve’s preferred inflation gauge is rapidly approaching 4% as a...
More bad news for consumers on electricity prices
Wholesale power prices on the largest electric grid in the United States jumped 76% in the first quarter due to soaring demand from data centers. The total cost of wholesale power on the 13-state grid managed by PJM Interconnection averaged $136.53 per megawatt-hour...
Wholesale prices race ahead in April in promise of higher future consumer inflation
Wholesale prices in April rose at their fastest rate in four years. The Producer Price Index, a measure of the costs that businesses pay for goods and services, rose 1.4% in April from the prior month, and is up 6% from a year earlier, the Bureau of Labor Statistics...
CPI inflation increased at an annual 3.8% rate in April
The headline Consumer Price Index rose 3.8% in April from a year earlier, the Labor Department reported on Tuesday, up from a 2.4% annual rate before the Iran war started in February and up from a 3.3% annual rate in March. In April consumer prices in the United...
Has wage growth slowed? It would be happening at a bad time
Earnings for American workers grew by less than expected in April, with a 3.6% growth in hourly earnings from a year earlier. The growth in hourly earnings was softer than the 3.8% increase that economists expected. This week’s Consumer Price Index (CPI) for April,...
The Fed looks to be planning for slowly growing inflation–as the only way out of a fiscal disaster
Watch what they do and not what the say is always good advice for investors trying to figure out what’s going on in the financial markets. Sure, the Federal Reserve has said that it has a target of no more than 2% inflation. And Jerome Powell & Co. have professed...
Yes, it’s very outdated but Core PCE inflation ran at a 2.8% rate in February before the war
The PCE inflation numbers always lag–they run a month behind the CPI inflation report. And the Personal Consumption Expenditures inflation report is even more backward looking than usual. The numbers reported today are for February–before the beginning of...
A minor difference of opinion on inflation and the effects of the Iran war
Treasury Secretary Scott Bessent’s insistence that the effects of the Iran war would be minor and transitory apparently so got to ECB president Christine Lagarde that she called him out in front of an audience of high-level Group of Seven officials. Bessent played...
OECD raises its projections for post-Iran war inflation
The war in Iran will lead to a surge in inflation this year, as the closure of the Strait of Hormuz pushes up prices for oil, gas and other commodities, the Organization for Economic Cooperation and Development (OECD) said on Thursday. The inflation rate in the United...
No interest rate move from the Fed today, but there was news
As expected, the Federal Reserve’s Open Market Committee left its benchmark short-term interest rate at 3.50% to 3.75%. But that doesn’t mean there wasn’t news from its Dot Plot projections for future GDP growth inflation, and interest rates. First, the Fed...
Will the Fed’s Wednesday Dot Plot move gold?
No secret. The big financial event of the week is the Wednesday, March 18, meeting of the Federal Reserve’s Open Market Committee. But the news out of that meeting will likely NOT be a decision on interest rates themselves. As of Friday, the CME FedWatch Tool was...
U.S. economy weaker than initially reported in fourth quarter of 2025
The U.S. economy was in worse shape in the weeks before the United States and Israel launched strikes against Iran than earlier government estimates had suggested, according to two closely watched economic benchmarks released Friday. Growth was slower than initially...Jim’s Daily Email Alerts:
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