Saturday , July 24 2021
Home / Tag Archives: inflation

Tag Archives: inflation

The Contraction Is Over, Which Means The Hard Part Only Begins

Conventional wisdom has said for a long time that a recession is two consecutive quarters of declining output. Where this idea came from, who knows. It’s a shorthand that was put together over time derived from the folks at the NBER. This latter group has claimed the responsibility for being the “official” arbiter of every recession, having become the go-to outfit for determining business cycles.What the NBER actually says about recession is that it is a serious downturn lasting more than a...

Read More »

Inching Closer To Another Warning, This One From Japan

Central bankers nearly everywhere have succumbed to recovery fever. This has been a common occurrence among their cohort ever since the earliest days of the crisis; the first one. Many of them, or their predecessors, since this standard of fantasyland has gone on for so long, had caught the malady as early as 2007 and 2008 when the world was only falling apart.The disease is just that potent; delirium the chief symptom, especially among the virus’ central banker variant.One need only review...

Read More »

Weekly Market Pulse: As Clear As Mud

Is there anyone left out there who doesn’t know the rate of economic growth is slowing? The 10-year Treasury yield has fallen 45 basis points since peaking in mid-March. 10-year TIPS yields have fallen by the same amount and now reside below -1% again. Copper prices peaked a little later (early May), fell 16% at the recent low, and are still down nearly 12% from the highs. Crude oil has recently joined in, falling 7% from its recent high. Energy stocks are in a full-blown correction,...

Read More »

ECB: Aligning Forward Guidance with New Inflation Target Framing

After the June CPI and PPI surge, the Federal Reserve does not appear to have changed its tune.  The price pressures are temporary, and the labor market is still "a ways off" from the "significant further progress" necessary to reduce the bond purchases.  Federal Reserve Chair Powell warned in his semi-annual testimony to Congress that inflation will likely remain elevated in the coming months before moderating.  Treasury Secretary Yellen shared a similar view separately. The case for the...

Read More »

Not The Chinese Numbers Anyone Was Hoping For

These are not the numbers to put anyone’s (rational) mind at ease. China’s data dump wasn’t terrible, but it didn’t need to be in order to amplify concerns about the state of the global economy. What the inflationary case required of the Chinese government instead was unambiguous, inarguable acceleration more consistent with the idea its economy is somehow performing up to that inflation potential.Again, these are in no way those figures.On the contrary, the economic accounts make it very...

Read More »

Powell Admits RRP and Collateral Scarcity, Still Unaware Of What It Means

I find it very uncomfortable to be in such agreement with monetary policy officials like Jay Powell. He and I both look at the inflation data, for example, and have come to the same conclusion that these consumer, producer, and commodity price deviations won’t last; though we arrive at our same view coming from very different use of analysis.Today, the Federal Reserve’s Chairman was asked in testimony before the House of Representatives about that darn reverse repo everyone is talking...

Read More »

And Now Three Huge PPIs Which Still Don’t Matter One Bit In Bond Market

And just like that, snap of the fingers, it’s gone. Without a “bad” Treasury auction, there was no stopping the bond market today from retracing all of yesterday’s (modest) selloff and then some. This despite the huge CPI estimates released before the prior session’s trading, and now PPI figures that are equally if not more obscene. The BLS reports today that its main producer price index (PPI), the one for finished goods, was up 9.19% year-over-year in June 2021. That was a bit more than...

Read More »

RBNZ Moves Ahead of the Queue, Will the Bank of Canada Maintain its Place?

Overview: The Reserve Bank of New Zealand jumped to the front of the queue of central banks adjusting monetary policy by announcing the end of its long-term asset purchases.   New Zealand's s 10-year benchmark yield jumped seven basis points, and the Kiwi is up almost 1%, to lead the move against the greenback today.  Sterling is up around a quarter of a percentage point after it reported a larger than expected rise in CPI.  Most of the other major currencies, but the Swiss franc and Swedish...

Read More »

Third CPI In A Row, Yet All Eyes On That 30s Auction

Three in a row, huge CPI gains. According to the BLS, headline consumer price inflation surged 5.39% (unadjusted) year-over-year during June 2021. This was another month at the highest since July 2008 (the last transitory inflationary episode). The core CPI rate gained 4.47% last month over June last year, the biggest since November 1991. More impressive (or worrisome, depending upon your view) was that the monthly change for the core rate was up again at 88 bps, beating expectations and...

Read More »

Bitcoin, El Salvador, And…The Eurodollar’s Ghost

The Salvadoran colón is still technically legal tender in El Salvador. The country’s government under President Francisco Flores had passed the Law of Monetary Integration in 2000, taking effect on January 1, 2001. This legalization of the US dollar for domestic circulation didn’t specifically remove the colón from common purchases or prohibit its use; the country’s Central Reserve Bank just stopped printing any more denominated paper notes and ceased minting any more of its coins. Why not...

Read More »