Inflation/Deflation

Powell Pushes Back Against March Rate Cut

As expected, the Fed decided to keep policy unchanged at the conclusion of the FOMC meeting on Wednesday. The changes to the Fed Statement generally indicate that the central bank is preparing to move towards easing monetary policy. Specifically, the…

2 年 2 年間 ago

Essentials

Decelerating ECI Consistent With Easing Price Pressures

The US Employment Cost Index for Q4 delivered a positive signal that the disinflation process is intact. The ECI’s slowdown from 1.1% q/q to 0.9% q/q came in softer than anticipations of 1.0% q/q. This marks the slowest pace of quarterly increase since 2021Q2…

2 年 2 年間 ago

CoreMacro

The UK And Japan Are At Wage Inflation Extremes. Why?

We describe and explain the wide disparity of wage inflation across G7 economies, and discuss what it means for the Fed, ECB, BoE, and BoJ policy moves in the coming year. Plus: we highlight two investments ripe for reversal, and two investments ripe for rebound.

2 年 2 年間 ago

Essentials

Dallas Fed Survey Corroborates Pessimistic Signal From Other Regional Fed Banks

Results of regional Fed surveys suggest that the US manufacturing sector is starting the year on a weak footing. Monday’s report from the Dallas Fed– the last to release its results for January – showed the headline manufacturing activity index collapse from…

2 年 2 年間 ago

Essentials

Deflationary Pressures Are Dampening Chinese Industrial Profits

China’s industrial profits registered their second consecutive annual contraction last year, falling by 2.3% in 2023. The full year contraction comes despite a surge in industrial profits near year-end. Profit growth came in at 16.8% y/y in December…

2 年 2 年間 ago

CoreMacro

A Nascent Mini Cycle

Is the rebound in European PMIs enough to boost the appeal of European risk assets?

2 年 2 年間 ago

Europe

Equities

Happily Ever After?

A recent slew of macroeconomic data has reassured us that the runway to a recession is longer than many thought. However, that positive realization comes with two caveats. First, the Fed pivot is not imminent, and the magnitude of rate cuts may disappoint. Second, the recession has been delayed but not avoided. Further, geopolitical risk is elevated. We will overweight Tech on the next dip and upgrade Retail to an overweight.

2 年 2 年間 ago

US Equities

Essentials

The Flaws In The Market's "Goldilocks" Narrative

According to BCA Research’s The Bank Credit Analyst service, there are two important flaws in the market’s “Goldilocks” narrative. First, investors are assuming inflation will fully return to target this year because core inflation ex-housing is already at…

2 年 2 年間 ago

Essentials

A Goldilocks US Economy?

Friday’s US Personal Income and Outlays report for December delivered a positive update on the US economy. On the growth side, the data confirm the signal from the Q4 GDP release that consumer spending continues to power the US economy. The robust 0.5%…

2 年 2 年間 ago

Essentials

Rising Economic Surprise Index Underscores Risk Of An Early Fed Pivot

With the latest PCE release confirming that the disinflation process is intact (see The Numbers), a key question facing investors is around the timing of the Fed’s pivot to rate cuts. Indeed, the US inflation surprise index has collapsed from its mid-2021…

2 年 2 年間 ago

Inflation/Deflation

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