Fed

Powell Remains Hawkish

Oct 19, 2023 2 min read

Fed Chair Jerome Powell should be very concerned about the rapid disinversion of the yield curve since early July as the bond yield soared from around 4.00% to nearly 5.00% today. If he is, he didn't show it during his interview today. Instead, he noted that the economy remains strong and monetary policy might have to be tightened some more: "We are attentive to recent

Ed Yardeni

Is Inflation Persistent, Sticky, or Transitory?

Oct 12, 2023 2 min read paid

In our opinion, price inflation is turning out to be transitory after all. Wage inflation is more persistent, but moderating. Rent inflation is stickier, but also moderating. Today's CPI report for September mostly confirms our assessment. Fed officials will undoubtedly stress that at 3.7% y/y and 4.1%, the headline and core CPI inflation rates remain too high above their 2.0% inflation target. However, some

Ed Yardeni

The Economic Week Ahead: October 2 - 6

Sep 30, 2023 2 min read paid

The first week of the month is usually jampacked with employment indicator releases. On balance, we expect they will show that the labor market remains relatively strong. August's JOLTS report (Tue) could show that job openings fell but remained high as evidenced by the "jobs plentiful" series in the consumer confidence survey (chart). The jobs plentiful series also suggests less upward pressure on wages, as measured

Ed Yardeni

Talking Heads Talk Stocks Down

Sep 26, 2023 2 min read paid

We were surprised that stock prices didn't drop yesterday along with bond prices. So we aren't surprised to see stock prices down today. Contributing to the selloff was JPMorgan Chase CEO Jamie Dimon, who warned interest rates may need to rise further to subdue inflation. In an interview with The Times of India, he said that the Fed might have to raise the federal funds rate

Ed Yardeni

FOMC's Message: High For Longer

Sep 20, 2023 2 min read paid

The FOMC’s latest Summary of Economic Projections (SEP) released today shows that the median forecast of the federal funds rate (FFR) for 2023 is 5.6%, unchanged from June’s SEP (table). The 2024 forecast was raised to 5.1% from 4.6%. As we expected, the FOMC’s message is that the FFR might be lowered next year by 50bps rather than 100bps. The latest SEP shows headline

Ed Yardeni

The Economic Week Ahead: September 18-22

Sep 16, 2023 2 min read paid

The Dot Plot thickens! Other than another FOMC meeting, it's a slow week ahead for economic indicators. The committee's statement is widely expected to pass on another rate hike, but suggest that there could be another one at the November meeting. All eyes will be on the Summary of Economic Projections (SEP), which is updated quarterly and includes the "Dot Plot," which shows the

Ed Yardeni

Consumers Fretting More About Credit & Less About Inflation

Sep 11, 2023 2 min read paid

Tech stocks seem to go up whenever the bond yield stops doing so. Leading tech stocks higher today was Tesla, which is actually in the S&P 500 Consumer Discretionary sector. Morgan Stanley issued a very bullish report on the auto company's new "Dojo" supercomputer. It suggests that Tesla may also be a play on AI. Meanwhile, the 10-year Treasury bond yield remained below 4.

Ed Yardeni

PCED Inflation Rate Still On Moderating Course

Aug 31, 2023 2 min read paid

Both the headline and core PCED inflation rates rose 0.2% m/m in July. Fed Chair Jerome Powell anticipated that they would be moderate as they were in June in his Jackson Hole speech on Friday of last week. However, he said that two consecutive months of such moderation aren't enough. He wants to see inflation drop closer to the Fed's 2.0% target on

Ed Yardeni

Hooray! Job Openings & Quits Fall

Aug 29, 2023 2 min read paid

The stock market rallied on Friday, Monday, and today despite Fed Chair Jerome Powell’s hawkish speech at Jackson Hole on Friday. The S&P 500 rose back above its 50-day moving average (chart). The 10-year Treasury bond yield fell to 4.12% today. The rallies in both stocks and bonds received a bullish jolt from June’s JOLTS report today showing fewer job openings and quits than expected

Ed Yardeni

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

Page 9 of 17