The US government RECESSION has begun:
Government + quasi-government education & health job addition accounts for ~70% of all payroll creation, down from ~85% in Feb 2024. It is expected this will fall even further in the coming months, meaning non-farm payrolls will weaken. Source: BofA
BREAKING - US INFLATION DATA RELEASED - Core PCE YoY 2.6% - lowest since March 2021
BULLISH! YoY Growth: PCE (Jan), 2.5% Vs. 2.5% Est. (prev. 2.6%) Core PCE, 2.6% Vs. 2.6% Est. (prev. 2.8%) MoM Growth: PCE (Jan), 0.3% Vs. 0.3% Est. (prev. 0.3%) Core PCE, 0.3% Vs. 0.3% Est. (prev. 0.2%) Source: @CyclesWithBach, Mike Zaccardi, CFA, CMT, MBA
U.S. pending home sales have fallen to a new all-time low
Worse than Covid. Worse than 2008. Source: Bloomberg
DOGE DEFLATIONARY EFFECTS?
Bloomberg Economics estimates that if hashtag#DOGE attempts to go for savings of $600B/year, GDP could take a -2% hit by the end of this year, the unemployment rate could rise by nearly a percentage point, and CPI y/y could fall by nearly 0.9 percentage points. Source: Kevin Gordon @KevRGordon on X
🚨US budget deficit is SKYROCKETING: The US borrowed $838 billion in the first 4 months of Fiscal Year 2025, or $7 BILLION A DAY.
This is $306bn HIGHER than the corresponding period last year, according to CBO👇 Source: Global Markets Investor @GlobalMktObserv
It's the liquidity stupid...
Bitcoin $BTC is finally catching up with the drop of liquidity (with a 10 weeks lag). The good news is that Global M2 is accelerating again (but due to the lag risk assets should resume uptrend later on - all other things being equal of course...) Source: Bloomberg, Joe Consorti
This is truly a historic moment for the US economy.
US government interest expense has gone parabolic in the past few years It has now crossed a staggering $1.1 TRILLION At this rate, it is expected to reach $1.7 trillion by 2034 US debt is now becoming a major concern Source: Bravos Research
➡️ US Treasuries rose after the minutes from last month’s Federal Reserve meeting revealed policymakers discussed pausing or slowing the balance-sheet runoff ...
... until the government’s debt-ceiling drama is resolved. 👉 Various participants noted it may be appropriate to consider pausing or slowing balance sheet runoff until resolution of debt ceiling dynamics. 👉 Many participants noted after conclusion of balance sheet runoff it would be appropriate to structure asset purchases to move maturity composition closer to outstanding stock of Treasury debt. 👉 Reserves might decline quickly upon resolution of the debt limit and, at the current pace of balance sheet runoff, might potentially reach levels below those viewed by the Committee as appropriate. 👉 Fed survey respondents forecast balance sheet runoff process concluding by mid-2025, slightly later than previously expected. Source: Bloomberg, TalkMarkets
