France PPI YOY is the lowest since 2009...
Source: Bloomberg, Alessio Urban
House prices adjusted for inflation since 1975.
The charts for Canada, Australia, New Zealand, and the UK look like a s**tcoin during a pump. The Japanese real estate bubble of the 1990s is barely visible as a comparison... Source: Bloomberg, MacroAlf
US Inflation – Where It Is And Isn’t
Source : Yahoo Finance
Another look at yesterday's inflation report by MacroAlf.
This chart shows supercore inflation - a measure of sticky inflationary pressures Powell & Co often refer to: - It slowed down vertically towards ~3% until the end of last year - But since then it has now accelerated rapidly to 5.5%! Source: MacroAlf
Headline CPI and Core CPI came out hotter than expected. SuperCore is the hottest since May 2023
-> Headline CPI: o Consumer prices rose 0.3% MoM (more than the 0.2% expected), driving the YOY change to 3.1% YoY versus 2.9% expected. Still, the decline from the +3.4% shows the disinflation trend is in place o Under the hood, food and Energy services costs jumped MoM along with transportation services -> Core CPI: o The index for all items less food and energy rose 0.4% MoM in January, the biggest jump since April 2023. The shelter index increased 0.6% MoM in January and was the largest factor in the monthly increase in the index for all items less food and energy. o Core CPI fell below 4.00% YoY for the first time since May 2021, but the +3.86% YoY print was hotter than the 3.7% expected. -> SuperCore CPI: o Core CPI Services Ex-Shelter index soared 0.7% MoM (the biggest jump since September 2022), driving the YoY change up to +4.4% - the hottest since May 2023 (see chart below). Our take: The disinflation trend remains in place. However, the “easy part” of the disinflationary process is behind. Buoyant final demand might sustain some upward pressures on prices. This data raises the odds that the Fed will stay put in March. Source: Bloomberg, www.zerohedge.com
Has the fed won the party?
US Medium-Term Inflation Expectations Lowest in 11 Years of Data – Source: Bloomberg
Inflation explained to a 5 years old kid: here's a 1960s McDonald’s menu.
Source: Peter Mallouk
FED: DON'T SEE CUTS UNTIL MORE CONFIDENT INFLATION NEARING 2%
In a nutshell · The FOMC voted unanimously to leave benchmark rate unchanged - as expected - in target range of 5.25%-5.5% for fourth straight meeting while making significant changes to statement · However, the statement was very much more hawkish than expected, as The Fed pushed back aggressively against the dovish market stance. Market reaction: -> The 10-year Treasury yield fell more than 7 basis points to 3.98%. The yield on the 2-year Treasury was last down about 8 basis points at 4.27% -> US equity indices are retreating. Gold is paring gains, dollar is recovering. -> Odds of a March Fed rate cut plummet from 47% to 31% after the Fed interest rate decision. Our take: The U.S. economy enters 2024 from a position of strength. For instance, the S&P PMI came in higher than expected last week. Q4 GDP growth in the U.S. came in at 3.3% annualized, well above expectations of 2.0% growth. And while disinflation is firmly in place, the inflation rate remains above the central bank target. There is thus no reason for the Fed to rush. Nevertheless, we still believe they will have to cut rates at some point for the following reasons: 1/ Keeping rates too high for too long can have long-lasting effects on US economic growth 2/ Keeping rates steady while inflation is coming down imply rising real rates. Keeping positive real rates for too long at a time when Uncle Sam is facing $33T debt and surging interest rates payments is unsustainable
