Inflation/Deflation
Transit through the Suez Canal has hit a new low. The 7-day moving average of daily ship transit calls is currently at 30, less than half of what it was at the end of 2023. The decline in volume has been even more severe, with metric tons passing through the…
Our Portfolio Allocation Summary for May 2024.
The ISM Services PMI largely disappointed in April. The headline index fell to 49.4 from 51.4, below expectations of a faster pace of growth. April’s contraction ends a streak of 15 consecutive months of services-sector expansion. Two alternative…
The Federal Reserve has a target inflation of 2%. But what level of inflation does the American public actually prefer? A recent NBER paper titled “Inflation Preferences” by Afrouzi, Dietrich, Myrseth, Priftis, and Schoenle surveyed one thousand…
Some thoughts on this morning’s employment report and recent trends in US economic data.
Investors should prepare for economic data to weaken even as policy uncertainty and geopolitical risk skyrocket ahead of the US election.
The Fed left the policy rate unchanged following its May FOMC meeting. It also announced it would slow the pace of quantitative tightening starting on June 1, from the current $60 billion per month to $25 billion per month for Treasuries redemptions, while…
Updated views on US Treasury yields and the dollar following today’s FOMC meeting.
Central banks are in a dilemma whether to prioritize supporting growth or bringing inflation back to target. This is unlikely to end well. Investors should be defensively positioned.
The Q1 US Employment Cost Index (ECI) accelerated at a faster-than-expected 1.2% q/q rate, from 0.9% q/q in Q4. On a year-on-year basis, it rose by 4.2% in Q1 and follows a similar annual increase in the previous quarter. The Fed is not expected to cut…