Yellen Goofs, Tells the Truth

Two quotes by Janet Yellen, only hours apart.  The first clearly emphasizes the very real risk of rapidly rising inflation… “It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat, even though the additional spending is relatively small relative to the size of the economy.” …while … continue reading →

Still Not Transitory

At some point – perhaps after six months of hot inflation data – the Fed will be forced to admit that inflation pressure are not transitory. This morning we saw evidence that March personal incomes spiked by 21.1%, the most since 1946. Personal spending for the month shot up 4.2%, the most since last June. … continue reading →

Not Transitory, Not Even Close

If gasoline prices remain where they are or continue to rise, Powell will be just plain wrong about inflation being transitory. This is what to expect if gas prices were to flatline at this level through December. Unless most of the other components of inflation were to nosedive, CPI will remain well above 2% for … continue reading →

The Fed’s Clever Misdirection

If you were playing a drinking game this morning keying off the word “transitory” you’d have passed out by now. Seemingly everyone is talking about inflation these days. They all want to know whether inflation will be transitory (as Jerome Powell repeatedly insists) or persistent. When it comes to markets, this is the wrong question. … continue reading →

What Inflation?

The Case-Shiller Home Price index rose 12% YoY – the fastest pace since February 2006 – meaning even fewer Americans have a shot at purchasing or renting a house. Ironically, the burden falls mostly on the low-income families that the Fed claims to be most concerned about. Thank goodness we don’t have an inflation problem. … continue reading →

Update on Oil & Gas: Apr 26, 2021

March durable goods orders disappointed this morning, coming in at 0.5% versus the 2.3% rebound expected after February’s -1.2% flop. We couldn’t help wonder whether the data were somehow related to the first (tiny) breakdown in RBOB prices since the Mar 23 lows. Given that oil and gas are poised to deliver a huge increase … continue reading →

A New Catalyst

Futures are struggling to retain their overnight bounce as we approach the open.  Yesterday saw equities drop like a rock on the news of a possible substantial increase in capital gains taxes for investors with large gains. This should come as no surprise to anyone who ever listened to candidate Biden, but markets are touchy … continue reading →