Fed

The Economic Week Ahead: August 21-25

Aug 19, 2023 2 min read paid

Ed Yardeni

The Urge To Merge

Jul 26, 2023 2 min read paid

When the banking crisis occurred during March, we concluded that the Fed's emergency liquidity response would contain the problem. We predicted that investors soon would be scrambling to determine which regional banks might be acquired rather than worrying about which of them might be seized by banking regulators. We argued that the higher costs of regulation that would soon be imposed on the smaller banks would force the

Ed Yardeni

Rolling Recession Rolling Over Commercial Real Estate (CRE)

Jul 24, 2023 2 min read paid

The rolling recession is rolling over the commercial real estate market (CRE), especially the market for urban office buildings. In our opinion, the challenges facing that market are serious but shouldn’t cause an economy-wide credit crunch and a recession. The Fed’s May 2023 Financial Stability Report included a review of the CRE credit market. The report observes: “The shift toward telework in many industries has dramatically reduced demand

Ed Yardeni

The Economic Week Ahead: July 24-28

Jul 23, 2023 2 min read paid

The Fed is widely expected to hike the federal funds rate (FFR) on Wednesday by 25bps to a range of 5.25%-5.50%. Will that be restrictive enough for the Fed? Will that be the terminal rate? At his presser on Wednesday after the FOMC meeting, Fed Chair Jerome Powell is likely to say: "Maybe, maybe not." He will acknowledge that inflation is still moderating even though

Ed Yardeni

June's CPI Was Cool

Jul 12, 2023 2 min read paid

Ed Yardeni

Market Not Fazed By Bearish Fed and Nvidia Talk

Jun 29, 2023 2 min read paid

The stock market held up remarkably well yesterday despite Fed Chair Jerome Powell's warning that "there's more restriction coming" because the labor market remains too strong. He suggested that 25-bps rate hikes are still on the table for the next two meetings of the FOMC. Powell spoke during a monetary policy session in Sintra, Portugal, which is famous for its huge crashing ocean waves

Ed Yardeni

Core Inflation: The True Story

Jun 18, 2023 2 min read paid

A few of our QT members asked us to explain why core CPI inflation, which has been so sticky over the past year, should moderate over the rest of this year. The headline CPI inflation rate has dropped significantly since last summer from around 9.0% to 4.0% in May (chart). But the core inflation rate has been stuck around 6.00% since early last year. The core CPI

Ed Yardeni

A Hawkish Skip at the Fed

Jun 14, 2023 2 min read paid

In this past Sunday's QT, we wrote: "On Wednesday, Fed Chair Jerome Powell will update us on the committee's latest views. Odds are the FOMC will skip another rate hike, but hint that rate hiking might not be over." Sure enough, the FOMC skipped and the committee's statement noted: "Holding the target range steady at this meeting allows the Committee to

Ed Yardeni

The Bull Was Pleasantly Surprised by May's CPI Today

Jun 13, 2023 2 min read paid

Stock prices rallied from the open today on May's CPI report. It wasn't surprisingly good. But investors and traders feared that it might be surprisingly bad. That's been the modus operandi of this bull market since October 12. It's been rallying on all the bad things that aren't happening. So far, there's been no recession, no earnings collapse,

Ed Yardeni

The Economic Week Ahead: June 12-16

Jun 10, 2023 2 min read paid

This will be a head spinning week. It could also be another rollercoaster ride in the financial markets. Maybe we should go on vacation and come back on Friday following the deluge of economic indicators from Monday through Thursday, and a FOMC meeting on Tuesday and Wednesday to boot. May's CPI will be released on Tuesday morning just as the FOMC convenes for a two-day meeting, which will

Ed Yardeni

Two Known Knowns About the Economy

May 31, 2023 2 min read paid

Investors are confused: Is the economy strong or is it weak? The answer is "Yes." The labor market is strong, but the manufacturing side of the economy is weak. We've all known that for a while. Today's indicators confirmed what we know. On the weak side today was the ISM Chicago Business Survey as evidenced by the drop in its Purchasing Managers Index (PMI)

Ed Yardeni

What's Driving Bond Yields?

May 22, 2023 2 min read paid

Two of our favorite technical indicators for the 10-year Treasury bond yield are currently bullish. The yield tends to be highly correlated with the ratio of the nearby futures prices of copper to gold (chart). The ratio suggests that the yield, which is currently 3.70%, should be much closer to 2.00%. We view the ratio as a risk-on versus a risk-off indicator. The Citigroup Economic Surprise Index (CESI)

Ed Yardeni

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