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 →

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 →

Last Call

Despite a few tense moments midday, ES held the TL of support from last Wednesday and has rebounded to within 7.50 points of the important Fibonacci extension and channel top at 4153.62.Will the substantial overhead resistance at these levels matter this time? We’ll know very, very soon. continued for members… … continue reading →

CPI’s Head Fake

This CPI data is significant in that it shot up over 2% – the highest since 2018 when the prints of 2.95% (July) and 2.70% (Aug) sent the 10Y up to 3.25%. But, it’s the inflation happening right now, which will be reported next month, that the Fed is worried about. As we’ve anticipated, March’s … continue reading →

Charts I’m Watching: Apr 12, 2021

Futures are off slightly on a low volume Monday following what should have been a bigger reaction to the latest PPI data that was off the charts. Either bond traders all took Friday off, or it would appear that the Fed has taken “supporting” the markets to new heights. Markets will have another chance to … continue reading →