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Latest UVA News Posts

Despite Surging Inflation, Markets Now View It As “Transitory”

On Thursday, June 10, despite a headline CPI of 5.0% Y/Y, the highest reading since August 2008, the “Inflation Narrative” turned on a dime. How else can one explain the rapid 12 basis point (0.12 percentage point) decline in the 10-Year Treasury Note yield, over half of which occurred after the CPI data release? “Inflation Jumps to a 13-Year High” screamed the headline on page A-1 of Friday’s (June 11) Wall …Read More

Apparently Money Really Does Grow On Trees!

Distortions from March’s helicopter money drop continue to cloud the forecast horizon. In nominal terms, income fell -13% M/M in April. This shouldn’t have been a surprise given that the free money raised March’s nominal income by 21%! Another distortion appeared in core PCE (Personal Consumption Expenditure) prices (the price index most watched by the Fed). It rose +0.7% in April, mainly on the back of reopening (rising prices of air fares, hotels, used …Read More

No “Boom,” No Systemic Inflation Instead, a Return to “Normal”

In many parts of the country, no more masks!  Businesses reopening.  And, it sure does look like the impact of the latest stimulus checks (helicopter money) faded fast.  Despite the fact that the IRS continues to send out billions more in stimulus funds as they process 2020 tax returns, April Retail Sales fell -0.7% M/M.  Market expectations were for a rise of +1.0%.  In the retail sales world, this is …Read More

Employment and Inflation: The Double Whammy

As much as the big miss in employment was a shock on Friday May 7, the May 12 CPI data turned out to be a double whammy.  April headline CPI came in at +0.8% M/M, while market consensus was +0.2%, another huge miss by market forecasters.  Y/Y CPI was  +4.2%, up significantly from March’s 2.6% Y/Y print. What appears strange to us, and looks to be contradictory to reality, is …Read More

The “Boom” Is Off the Rose

The employment number was a shock to the “boom” economy narrative; it was the biggest consensus miss in history! The majority of forecasters, even those with scores of economists and huge budgets, simply got the “boom” narrative wrong.  The Payroll Survey employment number was an “aberration” they hastily said.  But the sister Household Survey tells the same story. While Initial Unemployment Claims (ICs) are falling, they are still at recessionary …Read More

The “Economic Boom” Illusion

Upbeat data continues to make headlines. (The not-so-upbeat are relegated to the back pages.)  This week it was the +6.4% spurt in real GDP.  And, while the financial markets do feel a bit toppy, the S&P 500 still managed to eke out another record close on Thursday, April 29 (4211.47).  “Help Wanted” signs continue to be ubiquitous.  Companies are raising wages just to attract applicants.  The prices of lumber and …Read More