Going into Jackson Hole, the probability of a September hike is just 20%, well below 50%, so not likely. But, as shown below, the probability of a hike in November (see below) is now 50/50
What will it be when Jay is done? Source: Jim Bianco
EU Composite PMI... monetary policy works with a long and variable lag...
Source: Macrobond, Nordea
U.S. Home Purchase applications drop to lowest level in nearly 30 years
Source: Bloomberg, Barchart
"Soft landing" narrative is now the consensus. This also happened in 2000 and 2006...
Source: Game of Trades
Wage inflation: UPS workers approve massive new labor deal with big raises. The deal passed with 86.3% of votes, the highest contract vote in the history of Teamsters at UPS, according to the union
Under the new agreement: 1. Part time workers will make no less than $21/hour, up from a minimum of $15.50 currently, 2. Full time workers will average $49/hour. Current workers will get $2.75 more an hour this year and $7.50 an hour more over the five-year contract. 3. UPS drivers will average $170,000/year 4. Contract impacts ~340,000 workers 5. The company cut its full-year revenue and margin forecasts, citing the “volume impact from labor negotiations and the costs associated with the tentative agreement.” UPS has put $30 billion aside for this new contract
Over 60% of outstanding US mortgages have an interest rate below 4%. Current average 30y mortgage rate is north of 7.5%...
This is the 1 factor driving the limited housing supply as many of these homeowners can't afford to move... Source: Charlie Bilello, National Mortgage Database
The Bank of Japan is purchasing government bonds at a record pace this year
A factor that likely prompted its recent move to allow larger yield movements to reduce the strain on its control of longer-term #interestrates. Source: Bloomberg
Disinflationary forces are intensifying in Germany
Producer Prices drop for 1st time since 2020, a good leading indicator for Consumer Prices. In July, producer prices (PPI) fell by 6.0% YoY, the biggest decline since October 2009, when the financial crisis has caused prices to collapse. Last year, the prices received by manufacturers for their goods had at times risen at a record rate of 45.8%. Source: HolgerZ, Bloomberg
