Very strange to see the US spending like we are in a recession while calling for a "soft landing."
As highlighted by The Kobeissi Letter, the US is now spending 44% of GDP per year, the same levels as World War 2. Deficit spending alone is a massive 6% of GDP per year. Since the debt ceiling crisis, the US has been borrowing ~$14 billion PER DAY to cover deficit spending. By 2033, Bloomberg projects deficit spending will be ~7% of GDP... Source: CBO, The Kobeissi Letter
US 10 year yields keep rising in tandem with oil
WTI oil now trades at $93.5/bbl. So is oil & inflation fears the only reason for bond yields to move upward? Probably not. The fact that real yields are also on the rise shows that inflation is not the only culprit. Investors are adjusting to the reality of rates staying high for longer than expected. They are also requesting positive real yield to get compensated for being invested in US treasuries at the time the US Treasury is issuing massive amount of debt while the FED keeps shrinking its balance sheet through QT. Source chart: Bloomberg
The Total US Bond Market ETF now has a negative return over the last 7 years. $BND
Source: Charlie Bilello
Consumer balance sheets are getting stretched
Accumulating debt during a low interest rates environment is one thing. But in light of the continuous surge of the price of money, the US consumer is probably starting to feel the pain Source: Crescat Capital, Bloomberg
First time in 2023 that ElectionBettingOdds has had Trump in the lead
Source: Bespoke
After adjusting for inflation, US retail sales fell 1.3% over the last year, the 9th consecutive YoY decline
That's the longest down streak since 2009. Nominal retail sales increased 2% YoY vs. a historical average of 4.7%. Source: Charlie Bilello
US Bank credit YoY is now -0.2% YoY. First time negative since 08 (Keep in mind that in the US about 25% of credit is securities and the other 75% loans)
Source: FRED, Adem Tumerkan
Despite the strong upward move of the Citigroup US economic Surprises index and the strong YTD performance of financial assets, there are signs that things are that rosy for the SU economy
Source: TaviCosta
