The recent surge in domestic prices continued as consumer prices increased by 0.9% on a monthly basis and by 5.4% on a year-ago basis, according to Labor Department data released on Tuesday. … READ MORE >
inflation
CHART OF THE DAY: Inflation expectations remain rational and muted
A look at one of our preferred measurements of inflation expectations implies that the risk of a sustained outbreak of inflation is receding just as another set of inflation data—the Consumer Price Index for June—is about to be published on Tuesday. … READ MORE >
CHART OF THE DAY: Yield spread flattens as inflation trade unwinds
The Federal Open Market Committee unleashed a sharp change in market expectations following its Wednesday meeting, helping to curtail inflation fears. The idea of the first rate hike being pulled forward into 2023 with a possibility of 2022 elicited a change in the inflation trade and a resetting of market expectations of inflation. … READ MORE >
May CPI: Prices surge on strong base effects and economic reopening
We do not expect that these price increases will ease until the fall, when we expect that inflation will peak at just under 5% on a quarterly basis and then begin to ease back toward the Federal Reserve’s 2% target over the next year. … READ MORE >
CHART OF THE DAY: What caused the increase in consumer prices in April?
The debate of the moment in financial markets is inflation: Is it a risk to the economy? The data and our forecast would imply that while prices are rising in a cluster of industrial ecosystems that make up roughly 20% of the economy, we do not expect a sustained increase in overall prices. … READ MORE >
CHART OF THE DAY: Lumber futures down 33% over past month
Lumber futures have declined 33% since May 7, which likely reflects a mix of falling demand as contractors—shaken by the 372% surge in lumber prices during the past two years—back off potential projects and the slow but steady return of supply. … READ MORE >
The difference between noise and signal in U.S. wage growth
While we are observing some indicators that imply modest wage growth, at this point it is more noise than signal and does not imply an imminent breakout in wage push inflation that would end the three-decade period of quiescence in pricing. … READ MORE >
CHART OF THE DAY: A do-over year for the Consumer Price Index
The inflation numbers for April released on Wednesday show the Consumer Price Index rising by 4.2% compared to April 2020, higher than the Bloomberg consensus forecast of 3.6%. … READ MORE >
Fed policy decision: Steady as U.S. economy at inflection point
The Federal Reserve made no substantial changes on Wednesday to the path of interest rates, its monthly $120 billion in asset purchases, overnight interest rates or interest paid on excess reserves. … READ MORE >
Inflation expectations: Have they reached a peak?
The recent decline in yield most likely represents a rethinking by market participants and investors on the risk of rising inflation to the economic outlook. … READ MORE >