Inflation

Inflation Remains On Downward Trend

Aug 10, 2023 2 min read paid

The FOMC can take the rest of the year off. The federal funds rate is now restrictive enough to bring inflation down without causing a recession, in our opinion. The banking crisis in March, Moody's recent downgrade of several regional banks, and the Fed's latest Senior Loan Officer Opinion Survey all confirm that credit conditions are tightening. The economic data confirm that the economy remains resilient

Ed Yardeni

China Exporting Deflation to US

Aug 8, 2023 1 min read

The US doesn't have to experience a recession to bring inflation down if China's export prices are falling because China is already in a recession. Consider the following: (1) This evening we learned that China's CPI fell 0.3% y/y during July, the first such drop since February 2021. The PPI fell 4.4% over the same period (chart). (2) The CPI inflation

Ed Yardeni

The Economic Week Ahead: August 7-11

Aug 5, 2023 2 min read paid

Everyone hold your breath: The next BIG inflation number will be July's CPI (Thu). It could be troublesome for bonds and stocks. That's if the Cleveland Fed's Inflation Nowcasting is on track. It is updated each business day. On August 4, it projected that the headline and core CPI inflation rates will both be up 0.4% m/m. The comparable y/y inflation

Ed Yardeni

Upside Productivity Surprise Subdues Inflation, Maybe

Aug 3, 2023 1 min read

Wow! This morning's Q2 Productivity and Costs report was surprisingly good, but a bit hard to believe. Nonfarm productivity jumped 3.7% q/q (saar) as output increased 2.4% (the same as real GDP), while hours worked fell 1.3% (chart). The decline in hours worked is the first decline since Q2-2020 and was the result of a 1.3% decline in average weekly hours; employment was

Ed Yardeni

The Bull Deserves A Rest

Jul 27, 2023 2 min read

The bull market's winning streak ended today. The Dow closed higher for 13 straight sessions through Wednesday, its longest series of positive closes since 1987. It was down 0.67% today. The Dow's longest-ever winning streak was 14 sessions, set in 1897, according to S&P Dow Jones Indices. The S&P 500 closed at 4537.41 today after hitting a bull market intraday

Ed Yardeni

US Disinflation Is Made In China

Jul 13, 2023 2 min read paid

It's not quite the great fall of China. However, something is definitely wrong with China's economy. June's trade data showed that Chinese exports fell sharply for the second month in a row and imports have remained flat since mid-2021 (chart). It was widely expected that the end of the government's pandemic lockdowns late last year would boost economic activity in China and

Ed Yardeni

June's CPI Was Cool

Jul 12, 2023 2 min read paid

Ed Yardeni

Sunny Day

Jul 10, 2023 1 min read paid

Today was a sunny day for stocks and bonds following a few stormy days. That's even though two Federal Reserve district bank presidents (Daly & Mester) said that inflation remains too high and more rate hikes will probably be necessary to bring it down. On the other hand, another one of them (Bostic) said the Fed's "policy right now is clearly in the restrictive territory.

Ed Yardeni

The Economic Week Ahead: July 10-14

Jul 8, 2023 2 min read

This week is jampacked with June's inflation indicators. On balance, they should show that inflation continues to moderate. On Monday, the FRBNY survey of consumer inflationary expectations should decline from May's 4.1% for the one-year-ahead and 3.0% for the three-years-ahead readings. The price of gasoline has a big impact on these expectations, and it was down 26.5% y/y during the four weeks

Ed Yardeni

Eurozone Is In a Recession

Jun 26, 2023 2 min read

Greetings from Dubrovnik! My wife and I started our vacation in Croatia last Thursday. We will be back in the USA this coming Thursday. We started our trip in Zagreb for one day and Split for three days. Now we are in Dubrovnik for the rest of our stay. Croatia is beautiful and attracts lots of tourists this time of year. Tourism is the biggest industry here but it is

Ed Yardeni

The Economic Week Ahead: June 26-30

Jun 24, 2023 2 min read paid

May's personal income will be released on Friday. It is likely to be the week's most important economic indicator. It should show that consumers' incomes continue to grow, while inflation is still moderating. We know that our Earned Income Proxy for private wages and salaries in personal income rose to a record high in May (chart). We also expect to see that receipts of unearned

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

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