Inflation

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

Stocks Ignore The Fog Of War

Oct 11, 2023 2 min read paid

Ed Yardeni

A Sunny Day With Storm Clouds

Oct 10, 2023 2 min read paid

Despite the dark news coming out of the Middle East, today was sunny in the bond and stock markets. It's possible that the latest geopolitical turmoil has caused the 10-year bond yield to fall to 4.65% today from 4.80% at the end of last week, reflecting a flight to safety, which may be giving stocks a lift. However, the dollar index (DXY) and the price of

Ed Yardeni

The Economic Week Ahead: October 9-13

Oct 7, 2023 2 min read paid

This is a big week for two big issues troubling the bond market, namely inflation and the US federal budget deficit. The BIG event will be September's CPI (Thu). This time, September's PPI (Wed) will be released the day before instead of the day after the CPI. The headline inflation rates of both were inflated by energy prices, particularly gasoline prices (chart). The core CPI will

Ed Yardeni

Saudis Have A Vision

Sep 27, 2023 3 min read paid

Saudi Vision 2030 is the vision of Saudi Crown Prince and Prime Minister Mohammed bin Salman (MBS). He wants to diversify the economy of his country. Saudi Arabia’s sovereign wealth fund aims to spend $40 billion a year on the domestic economy—including the construction of Neom, a futuristic city in the desert with an estimated price tag of $500 billion. By some estimates that requires that the price

Ed Yardeni

The Economic Week Ahead: September 25-29

Sep 23, 2023 2 min read paid

This is a relatively slow week for economic data. That means that the markets will be mostly entertained by the talking heads of the Federal Open Mouth Committee. The chattering started on Friday, when two Fed officials (Governor Michelle Bowman and Boston Fed President Susan Collins) endorsed Fed Chair Jerome Powell's remark during his presser on Wednesday: "[W]e're committed to achieving and sustaining a

Ed Yardeni

Good News Is Bad News, For Now

Sep 21, 2023 2 min read paid

The Fed's hawkish pause has unsettled the bond and stock markets. During 2022 and early 2023, the widespread fear was that the Fed's tightening of monetary policy would send the economy into a recession, depressing corporate earnings and the stock market. Now the fear is that stronger-than-expected economic growth will force the Fed to maintain its restrictive stance for some time. So good news is bad

Ed Yardeni

Canada's Inflation Spooks Bonds Around the World

Sep 19, 2023 2 min read paid

Canada's CPI inflation rate in August jumped to 4.0% from 3.3% in July on higher gasoline prices. Shelter prices also jumped by 6.0% after a 5.1% advance in July, pushed up in part by rising rents and higher interest rates. The closely watched trimmed-mean CPI rate unexpectedly rebounded to 3.9%, well above expectations of 3.5%. The Canadian 10-year government bond yield jumped

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

Action Packed Week

Sep 14, 2023 2 min read paid

It certainly has been an action-packed week so far, and there is still Friday to go. Today, the ECB raised its official interest rates by 25bps; the People’s Bank of China lowered the reserve requirement ratio for most banks by 25 basis points; and, the price of oil continued to increase. Yesterday's headline CPI and today's headline PPI inflation rates for August were boosted by

Ed Yardeni

Inflation Is Still Cooling

Sep 13, 2023 2 min read paid

Today's CPI report suggests that inflation is continuing to cool. That's not a new development so the financial markets barely reacted. Needless to say, if the report suggested that inflation wasn't moderating, both bond and stock prices would have tanked. We are expecting a weak retail sales report tomorrow, which should be greeted favorably by both. We attribute much of the decline in the

Ed Yardeni

Bond Prices Are Tuning Out Some Bad News For Now

Sep 12, 2023 2 min read paid

The good news this morning was that the bond yield held below 4.30% despite rising oil prices and a mixed August survey of small business owners conducted by the National Federation of Independent Business (NFIB). Bond investors are patiently awaiting tomorrow's CPI. They might also have been calmed by a September 10 WSJ article suggesting that the FOMC isn't likely to raise the federal funds

Ed Yardeni

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