The LDEI is more reliable than the Citi Surprise Index
Currently, those wanting to see real-time trends in economic data turn to the Citi Economic Surprise Index. Many strategists use it because it is the only tool, until the Lantern Daily Economic Index (LDEI), to track real-time aggregate economic data. In the latest FOMC meeting…
Economic data are rounding over and so are yields
Happy Thanksgiving everyone! On balance, since November 12th when the NFIB small-business survey was released strong, economic data has been coming back down again. This has been seen in retail sales (less autos), housing starts, permits, new home sales, durable goods orders (less transportation), and…
Powell not that hawkish and more
Jerome Powell spoke and had a Q&A session with Catherine Rampell of the Washington Post in Dallas yesterday. Here is what I noticed. In the opening remarks, Powell emphasized the idea that the economy is good, each meeting is not pre-determined, and that the committee…
Four charts
After the election, and with interest rates rising, it feels as though a recession is the furthest thing from happening. Yet, I continue to expect one early next year. Economic data has come in waves all throughout this “top of the business cycle”. Every time…
FOMC meeting review: economic rate rise and slightly dovish
The FOMC met today, cut 25 basis points, and changed very little of the statement. Powell’s press conference was slightly dovish. Here is what stood out to me: 1. About higher Treasury yields. When asked about rising Treasury yields (a couple times), Powell said it…
Trump won, but the business cycle is the same
Donald Trump won the U.S. Presidency last night and there is a 97% chance that Republicans will have control of both chambers of Congress. This is the worst-case scenario for fiscal spending but the reaction from the bond market is telling. The bond market is…
Why Treasury yields rose today
On the surface, rising Treasury yields today seem impossible because non-farm payrolls and their revisions were weaker, manufacturing ISM was weaker, and Trump’s odds to win in betting markets has fallen 7 points since Wednesday meaning the “Trump trade” should be in reverse. US sovereign…
The Beige Book is better and the 2-year yield isn’t done rising
The Beige Book, a compilation of anecdotal reports on the economy that the Fed will consider for its upcoming November 7th meeting, was released today. In it, fewer districts were characterized as contracting and, combined with my work on the GDP of each Fed district,…
Hotter inflation is more important than weaker initial jobless claims today
Two important economic data releases came out today that were divergent. Inflation in the CPI report (Consumer Price Index) was hotter than expected suggesting higher interest rates but initial jobless claims jumped up 33k suggesting lower interest rates. The bond market has mostly paid attention…
5 points from Jerome Powell’s interview yesterday
My added emphasis throughout. Yesterday, Jerome Powell sat down for a live Q&A with the President of the NABE (National Association for Business Economics), Ellen Zentner, at their annual conference. Powell had a strong bullish tone and spent much of his time trying to warn…