The Fed's preferred measure of inflation (Core PCE) moved down to 3.5% in October, the lowest since April 2021
The Fed Funds Rate is now 1.8% above Core PCE, the most restrictive monetary policy we've seen since 2007. Source: Charlie Bilello
The German labor market is now sending out alarm signals despite the shortage of skilled workers
Germany’s unemployment rate unexpectedly rose to 5.9% in November, the highest level in 2.5 years. Joblessness increased by 22k. Source: Bloomberg, HolgerZ
Eurozone inflation cooled more than expected, putting 2% target in sight:
Headline CPI rose 2.4% YoY in November down from 2.9% in October. Core CPI, which excludes volatile components like fuel & food, moderated for a 4th month to 3.6% from 4.2% in October. Markets are now pricing 1st ECB rate cut to take place at the April meeting. Source: HolgerZ, Bloomberg
Futures are now showing a ~45% chance that FED rate CUTS begin as soon as March 2024
There's also a growing (but small) chance that rate cuts begin in January 2024, at 4%. Prior to the most recent CPI inflation data, the base case showed rate cuts beginning in June 2024. There was also a 50% chance of another rate HIKE in 2024. This has been a quick turnaround... Source: The Kobeissi Letter
German inflation sinks more than expected as energy retreats & costs of fuels & travel fell sharply from prior mth
Headline CPI slows to 3.2% YoY in Nov from 3.8% in Oct & vs 3.5% exp. Food inflation slows to 5,5% from 6.1%, Core CPI dropped from 4.3% to 3.8%, so a long way to go to 2% goal. Source: Bloomberg, HolgerZ
US GDP update shows US economy grew at more robust annualized rate of 5.2% in Q3, revised from +4.9% and after +2.1% QoQ in Q2
The Q3 contribution from inventories was +1.4%, revised from +1.3%, after 0% in Q2. Contribution from consumers +2.4% revised down from prev 2.7%. Contribution from net exports was -0.04%, revised from -0.08%, after +0.04% in Q2. Source: HolgerZ, Bloomberg
The US National Debt has now increased by $2.36 trillion since the debt ceiling was suspended less than 6 months ago
Fast approaching $34 trillion. Source: Charlie Bilello
Dozen of countries are now seeing a steady decline in C02 emissions alongside economic growth
Another tangible proof that being green (or at least greener) does not mean de-growth Source: FT
