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Tag Archives: PCE

GDP And Revisions Highlight The Vulnerabilities

It usually takes them a little while, a couple of benchmark adjustments to better conform to the true shape. Today’s GDP report included the latest revisions to the underlying data. Overall, not much changed. The changes are applied to Q1 2014 and forward, upping Real GDP growth slightly in 2015, adding a little bit more to the tail end of Reflation #3 in 2017, and them taking some away from what’s recorded so far under Euro$ #4. Most noticeably, that last 4% quarter (Q2 2018) is now gone and...

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Federal Reserve Headlines – Fact or Fiction?

“When it becomes serious, you have to lie.” – Jean-Claude Juncker, former President of the Eurogroup of Eurozone finance ministers On July 16, 2019, Chicago Federal Reserve President Charles Evans made a series of comments that were blasted across the financial news wires. In the headlines taken from his speech on the 16th and other statements over the past few weeks, Mr. Evans argues for the need to cut interest rates at the July 31st meeting and future meetings. In this article, we look...

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More and More The Economic Inflection

You do wonder sometimes whether the person responsible for writing these things ever cringes while they do so. Are they ever shocked by a sudden bout of conscience? Then again, most of it is bland boilerplate language and when it’s not the difference is hidden under a maze of intentionally induced complexity or misdirection. The statement the FOMC released after its April/May policy meeting started out with the following: Information received since the Federal Open Market Committee met in...

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Is The Fed Losing Control Of Inflation?

Judging by several key economic indicators, it’s reasonable to assume that inflation will remain steady a moderate pace. US GDP growth in the first quarter quickened to a solid 3.2% increase and the labor market expanded at a strong pace in April. Later this year, the expansion will become the longest on record for the US. Such numbers suggest that inflation should be stable if not accelerating. But for reasons that no one fully understands, pricing pressure has been tepid and may...

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In The Fed We Trust – Part 1

This article is the first part of a two-part article. Due to its length and importance, we split it to help readers’ better digest the information. The purpose of the article is to define money and currency and discuss their differences and risks. It is with this knowledge that we can better appreciate the path that massive deficits and monetary tomfoolery are putting us on and what we can do to protect ourselves.   How often do you think about what the dollar bills in your wallet or the...

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Inflation: The Fed’s False Flag

“Don’t piss down my back and tell me it’s raining” –Clint Eastwood/The Outlaw Josey Wales On April 30, 2019, one day before the Federal Reserve’s FOMC policy-setting meeting, the Wall Street Journal published an article by Nick Timiraos and Paul Kiernan entitled Inflation Is Likely to Fuel Discussions as Fed Officials Meet. We quickly recognized this article was not the thoughts of the curious authors but more than likely indirect Fed messaging. Similar to a trial balloon, conveyances...

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Will Friday’s Inflation Report Support The Fed’s Outlook?

Public statements by Federal Reserve officials in recent days remains unified in forecasting that the recent deceleration in a key measure of core inflation is “transitory.” The first reality check on that outlook via hard data is scheduled for this Friday’s April report for the Consumer Price Index (CPI). Economists are expecting that core reading of pricing pressure (CPI less the volatile food and energy components) will tick up to a 2.1% annual pace, based on Econoday.com’s...

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A First Look At Why Greater Demand For Scapegoats Than Rate Cuts

At the end of last week, the Bureau of Economic Analysis reported data on US Personal Income and Spending that hit every sour note. There was the lowest inflation rate, the deflator to those spending figures, in years as well as the clear need to officially anoint a successor to the Verizon madness. The release also featured residual seasonality, and, most of all, even less of full employment than there had been at any time last year (which was never much). Small wonder the President’s chief...

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BEA Backs Up Census; Residual Seasonality Struck A Month Too Soon

Over the last decade, the US economy has been experiencing “residual seasonality.” It has begun each year unusually weak. For Economists expecting it take off in each and every one, this is more than a thorny contradiction. When it happened again in 2015, at the worst possible moment for the mainstream view, they had finally had enough. The Bureau of Economic Analysis was called out for what was surely a quirk in their statistical processes. The BEA in response promised an exhaustive review,...

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GDP Prices The Final End Of Hysteria

Jerome Powell may be hawkish, relatively speaking, but his case rests on one data point alone. There is nothing other than the unemployment right now indicating he’s got the right forecast in mind. This wasn’t true just months ago. At the end of 2017 and for a few months in 2018, inflation was moving upward and above targets and benchmarks. Inflation expectations, especially in a recalcitrant Treasury market, were pushing higher, too. These things were supposed to be consistent and related....

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