We find the recent discussion around the end of the dollar dominance bereft of any linkage to the reality of international finance. … READ MORE >
Federal Reserve
Lower-than-expected retail sales raise recession probability
Retail sales dropped for the second month in a row in March as demand for goods and food services continued to ease, suggesting the end of the business cycle. … READ MORE >
Jobless claims and producer prices point to a further slowdown
For the Federal Reserve, the new data bolstered the case that it will pause its rate increases after one final hike in this cycle on May 3. … READ MORE >
March inflation data points to a Fed rate peak in May
The inflation outlook improved in March because of a mix of year-over-year base effects and a significant decline in energy prices, all of which caused the top-line reading to decline to 5% from 6% previously. … READ MORE >
After flush years, households show a reluctance to borrow
As flush households face the potential of an economic slowdown, they are reluctant to take on debt. Instead, households appear to prefer precautionary saving in contrast with overconsumption. … READ MORE >
Service sector growth weakens in March
March’s services composite index was 51.2, slightly higher than the long-term threshold of 49.9, according to ISM data. An index above 49.9 indicates expansion. … READ MORE >
Job openings and factory orders soften amid recession concerns
Job openings and factory orders came in lower than expected on Tuesday, continuing to show signs of softening economic demand that should work in the Federal Reserve’s favor in fighting inflation. When the new data is combined with softer economic data released recently, the risk of a recession in … … READ MORE >
Manufacturing continues to show recession signs
The manufacturing sector contracted for the fourth month in a row in March as the pace of the decline accelerated, according to ISM data. … READ MORE >
Bank deposit carousel continues as investors search for yield
The large gap between money market funds and bank deposit rates as well as what the banks themselves can obtain risk free at the Fed’s repo facility implies that cash will continue to move into the short end of the curve. … READ MORE >
Fed’s key gauges of inflation soften in February
Prices grew by 0.3% on the month; for the core component, they rose by 0.3% while the “super core” stayed at 0.3%. … READ MORE >