Fed

January's CPI Is Coming. Run For The Hills?

Feb 11, 2023 2 min read paid

The big event this week will be January's CPI release on Tuesday. Bond yields rose and stock prices fell last week as investors started anticipating a bad print. The Cleveland Fed provides a daily model-based Inflation Nowcast. On February 10, it showed the headline and core indexes increasing 0.65% and 0.46% last month. These are high compared to the MarketWatch consensus of 0.4% and 0.

Ed Yardeni

They're back!

Feb 8, 2023 2 min read

We warned you that they would be back soon. The FOMC's blackout period ended last Thursday. Fed officials have been squawking like hawks again since Friday. They are all sending more or less the same message. They are aiming to continue to hike the federal funds rate in 25bps increments a couple more times to 5.00%-5.25%. That should be restrictive enough to bring inflation down,

Ed Yardeni

Fed Chair Not Likely to Stir Things Up Tomorrow

Feb 6, 2023 2 min read

Fed Chair Jerome Powell isn't likely to upset the financial markets tomorrow if he says what he said at his press conference last week. The word “disinflation” was uttered 11 times at Powell’s presser on February 1. He was the only one who mentioned the word at his presser. He repeatedly acknowledged that inflation was moderating but still had a ways to go before reaching the Fed’

Ed Yardeni

Less Inflation & Growth In Three Regional Surveys

Jan 24, 2023 1 min read paid

We now have three business surveys for January conducted by the NY, Philly, and Richmond Fed district banks. Collectively, they are showing less economic growth and lower inflation. The average of their general business indexes dropped further into negative territory this month, suggesting that the M-PMI also fell further below 50.0 this month (chart).

Ed Yardeni

Goldilocks, the Bears & Today's CPI

Jan 12, 2023 2 min read paid

Ed Yardeni

Small Business Owners Say Job Market Cooling

Jan 10, 2023 2 min read

December's NFIB survey of small business owners should make the Fed's hawks a bit less hawkish. They want to see evidence that the labor market is cooling and that inflationary pressures are easing. Today's NFIB report confirmed that both may be underway: (1) Fed officials have been focusing on job openings in the JOLTS report. They want to see it drop significantly indicating that

Ed Yardeni

Strong Labor Market Frustrates Fed

Jan 5, 2023 2 min read paid

On August 27, 2020, Fed Chair Jerome Powell's speech at Jackson Hole explained why on that same day the Fed issued a revised Statement on Longer-Run Goals and Monetary Policy Strategy. The statement and Powell's remarks stressed that monetary policy would focus on reviving the labor market after it was weakened by the pandemic. Powell said: "With regard to the employment side of our mandate,

Ed Yardeni

A Bowl of Mixed Nuts

Jan 4, 2023 2 min read paid

Today's batch of economic indicators was mixed, showing that the manufacturing economy remains weak, while the labor market remains strong. In addition, inflationary pressures continue to ebb in the goods sector. Yesterday, the Atlanta Fed's GDPNow tracking model's latest estimate was that real GDP rose 3.9% (saar) during Q4, up from 3.2% during Q3. Here's more:

Ed Yardeni

Bonds Weigh On Stocks

Dec 27, 2022 1 min read paid

The 10-year US Treasury bond yield rose from a recent low of 3.425% on December 7 to 3.849% today, the highest since early November. We still believe it peaked at 4.248% on October 12. The spread between the 10-year and 2-year US Treasuries remained inverted at 50bps today. An inverted yield curve tends to coincide with the end of monetary policy tightening cycles and peaks in the

Ed Yardeni

Fireworks Before Christmas?

Dec 20, 2022 2 min read

Santa is on his back foot. Fed Chair Powell's presser was hawkish last Wednesday. Thursday's batch of economic indicators seemed to support the hard-landing scenario. Could the Santa Claus rally make a comeback before Christmas despite the Grinch at the Fed? It could, depending on November's personal income report to be released on Friday. We think that it will confirm that inflation is moderating

Ed Yardeni

The Economic Week Ahead: Dec. 19 - Dec. 24

Dec 17, 2022 2 min read

Last Tuesday's good CPI news wasn't good enough according to Fed Chair Jerome Powell. In his Wednesday presser, he remained hawkish suggesting that the federal funds rate would be raised early next year to 5.00%-5.25% (bracketing the latest median forecast of the FOMC) and maintained at that restrictive level until inflation moderated significantly. Friday morning, Federal Reserve Bank of New York President John

Ed Yardeni

The Fed: Higher For Longer

Dec 14, 2022 1 min read paid

The FOMC provided its latest Summary of Economic Projections (SEP) today after the committee announced a 50bps rate hike to a range of 4.25%-4.50% (table). At his press conference, Fed Chair Jerome Powell acknowledged that that the rate is now restrictive, but not restrictive enough.

Ed Yardeni

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