Summary: Looking at the Feds dual mandates of price stability and employment, the arrow still points towards a need to act against inflation. The tight labor market points to a late cycle economy with core inflation increasing 6.3% in the last release. There could be an argument made that the deflationary gains we have seen … Read more
Summary: Markets continue to look for daily stimulus amidst a macroeconomic environment in the process of regime shift. Pivot narratives live and die by month to month data releases despite the ability of underlying economic actors to grind on and on simply from the momentum generated by such massive systems. Recessions are seemingly universally agreed … Read more
Summary: Not much change in narrative month over month from macro basis. We are starting to see more clearly where the basis of next recession might form. Borrowing rates are sharply higher, but consumer credit continues to expand, and there is the question of when this might become out of necessity and not from wealth … Read more
Summary: Market showing renewed volatility as the FED’s commitment to rate hikes becomes apparent to even the most begrudging participants. Message of hard times ahead signal clear intent that the FED’s number one goal is to crush inflation, even at the cost of recession. As data will show, both the message and hikes that have … Read more
Summary: Inflation softened somewhat in July 2022, prompting hopes of a FED pivot. 12-month PCE dropped back to 6.3%, from our peak levels (so far) of 6.8%. The FED’s target inflation level is 2%. Some tailwinds for a inflation levels dropping are unfortunately headwinds for economic growth. In this month’s releases, we see slowdowns in … Read more
Summary: Primary narrative continues to be inflation. The FED continues to fight inflation with rate hikes, and markets pricing in FED capitulation sometime in early 2023. While inflation seems unaffected so far, economic growth has slowed. Consumer credit growth is slowing, certain spending areas are declining, and savings are going back up. Both business and … Read more
Summary: While financial markets swirl from headline to headline, underlying economic data remains slow to materialize the fears that are driving daily price action. Consumer spending continues to increase and while some employment levels like initial claims flash, total unemployment remains low. Business and consumer sentiment is still unfavorable, but business capex and employment spending … Read more
Summary: We close out April on strong negative market sentiment, with the S & P 500 losing 10% over the course of the month. The Nasdaq has had its worst month since 2018. Volatility caused by recession anxiety are headlined by a prolonged Russian war in Ukraine, continued increasing inflation expectations and fears of the … Read more
Summary: Through the lens of lagged economic data, we see a picture of an economy with a tight labor environment, high consumer demand and a strong housing market. Not too many data releases last over the last month, but there was enough confirmation for the FED to begin rate hikes as expected. FED balance sheet … Read more
Summary: The Russian invasion of Ukraine has skewed markets towards volatility, inflation and uncertainty. An indeterminate resolution that drags over weeks or months will increase the likelihood of long standing impact to markets. Parsing out the unknowable resolution to the war in Ukraine, we see a US economy that is continuing to push towards normalization. … Read more