Policy Lags are Real – Inflation’s Days are Numbered
There are several measures of the money supply, the most looked at being M2 (cash + demand deposits + time deposits + retail money market funds). That official series goes back to 1959, although estimates are going back even further. But just looking at this 64-year history, we find that the two growth rate extremes […]
As Signs of Recession Mount, the Fed Reiterates its Hawkish Path (Even Volcker Relented as the Recession Approached!)
The chart shows the continued downtrend in same store sales and, while the Seasonally Adjusted (SA) rise in April’s Retail Sales of +0.4% over the March number was cheered by the financial media, the Not Seasonally Adjusted (NSA) data showed a -2.4% fall vs. March and was the worst showing for any April in the […]
More Proof: Deflation Is The Future
Consumer Prices The Consumer Price Index (CPI) rose +0.4% in April (4.95% Y/Y). Core services (ex-housing), an important sub-index for the Fed, came in a little hot at +0.4% M/M (vs. +0.3% in March). In our view, this alone isn’t likely to cause the Fed to raise the Fed Funds rate yet again when it […]
The Seeds of Deflation – Sewn by the Fed
Despite the many announced layoffs these past few months, the unemployment rate decreased to 3.4%. That’s tied for the lowest level since 1953. Of course, the politicians will take heaps of credit, but the fact is that it fell, not because of job growth, but because people left the labor force, which is really not […]
March Inflation: In Like a Lion; Out Like a Lamb
The CPI came out on Wednesday – it only rose +0.1% in March – that’s down from +0.4% in February and +0.5% in January. On a Y/Y basis, it fell from +6.0% in February and +6.4% in January to +5.0% (see table). CPI actually rose only +0.053% to the 3rd decimal (about half as much […]
Deflation is the Future
Most of the panic from the mid-March bank runs seems to have dissipated. But, we caution, most of the real fallout lies ahead as banks move into restructuring mode, which will only serve to deepen the Recession. There are still some “Nervous Nellies” on the Street when it comes to the Regional Banks. On Wednesday, […]