By no means are any of these PMI numbers terrible. In the vacuum of mainstream Economics' ceteris paribus fantasy, these might all be mildly pleasing. There is no such thing, however, and despite where they now are these are verging closer to comparisons which could be, several already have been, concerning. As such, the direction and trend being established as [...]
With the eurodollar futures curve slightly inverted, the implications of it are somewhat specific to the features of that particular market. And there’s more than enough reason to reasonably suspect this development is more specifically deflationary money than more general economic concerns. What I mean is, those latter have come later (“growth scare”) only long after the world’s real money [...]
For the FOMC, there was no alternative. The CPI’s keep going higher while the unemployment rate continues lower. Those who are Economists and practice Economics’ brand of econometrics, these would be scary times ahead. Inflationary times unless someone puts a stop to them first. Not because of consumer prices today, but because officials are worried consumers are becoming normalized to [...]
Basic intuition says this is a no-brainer. Producer prices rise, businesses then pass along these higher input costs to their customers in the form of consumer price “inflation” so as to preserve profits. This is the supply chain hypothesis. Statistically, we’d therefore expect the PPI to lead the CPI.And this was expected for much of Economics’ history, taken for granted [...]
The headlines last Friday were ominous: Inflation Hits Highest Level in Nearly 40 Years Inflation is Painfully High... Groceries and Christmas Presents Are Going To Cost More Inflation is Soaring.. America's Inflation Burst This morning on Face The Nation, Mohamed El-Erian, former Harvard endowment manager, former bond king apprentice, economist, and the man who seems to have a permanent presence [...]
The economic news recently has been better than expected and in most cases just pretty darn good. That isn't true on a global basis, as Europe continues to experience a pretty sluggish recovery from COVID. And China is busy shooting itself in the foot as Xi pursues the re-Maoing of Chinese society, damn the economic costs. But here in the [...]
Treasury Secretary Janet Yellen hasn’t just been busy hawking cash management bills, her department has also been filling back up with the usual stuff, too. Regular T-bills. Going back to October 14, at the same time the CMB’s have been revived, so, too, have the 4-week and 13-week (3-month). Not the 8-week, though.Of the first, it’s been a real tsunami [...]
Supply shock versus inflation. There’s a huge difference, both in terms of what causes each and how they play out. As discussed in great detail here, it is the bond market not central bankers which repeatedly has proved it can sort out this enormously consequential distinction. Bonds know if there is an overflow of money, they need to pay attention [...]
In a very real sense, neither the current rate of PCE Deflator “inflation” nor any more expected to be added by the reported LABOR SHORTAGE!!! are what’s pushing the Federal Reserve toward its next taper error. The Fed doesn’t do money, so that’s not an option for them by which to set policy parameters. All that’s left, then, is “expectations.”Jay [...]
The Chinese yuan had traded in a curiously narrow range ever since mid-June. Stuck, it seemed, between 6.50 at the bottom and around 6.45 ceiling, the lack of movement in either direction raised suspicions of concerted official effort. China’s officials, obviously, certainly not those from the Federal Reserve who spend all their time scouring drug reports and benefits cliffs so [...]
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