COVID: Still With Us

Interesting piece in Reuters today on Japan’s vaccination efforts and the overwhelming level of infections in Osaka, Japan’s second largest city, only two months ahead of the Olympics. While many countries are making good progress with vaccinations, Japan – the 11th most populous country in the world – is lagging badly.  It’s not the only … continue reading →

PPI Confirms Hot Inflation

It comes as no surprise that PPI confirmed yesterday’s hot CPI print, coming in at a whopping 6.2%. We’ve been beating the inflation drum for so long, it feels a bit anticlimactic to acknowledge that it’s finally here and even slightly greater than we anticipated. As regular readers well know, I expected central bankers to … continue reading →

Blowout Inflation is Here

April CPI came in at 4.2%, a rate not seen since August 2008. CPI has topped 4.2% only twelve months in the past 30 years, with the bulk of those instances during Jan-Sep 2008 when CPI pushed above 10Y yields. The Fed has managed (so far) to keep a lid on yields, providing additional evidence … continue reading →

Biggest Jobs Disappointment in Over 20 Years

Blockbuster jobs data? Not so much. At 266K versus over 1MM consensus, it was the worst miss since 1998. The futures initially held the overnight ramp, taking their cues from VIX, which barely budged on the hugely disappointing print. But, VIX also hasn’t (yet) broken down the way it normally would if a full-court press … continue reading →

Charts I’m Watching: May 6, 2021

Futures are flat after tumbling to and holding our backtest target yesterday morning. But, pay no attention to stocks just yet. They should continue to be under pressure, with the real action in oil and gas. continued for members… … continue reading →

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 →