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. […]
Incoming Data Looks Robust – It’s A Mirage
Incoming PPI data marked the initial volley of the oncoming “siege” of inflation data. Despite reopenings, state Initial Unemployment Claims spiked as March ended. Either the reopening lags are longer than we thought, or disincentives from overly generous benefit payments are at play. If recent history is any guide, only part (25%) of the stimulus […]
Dysfunctional Credit Markets – Still Waiting on the Fed
As the week ended, U.S. credit markets appeared confused, if not outright dysfunctional. The 10-Year Treasury yield began February at 1.09% and reached an interim peak of 1.54% on February 25. Then it retreated to 1.42% as markets thought the rise had simply been overdone. But Fed Chair Powell’s refusal to assure financial markets regarding […]