Employment Numbers Mislead, the Coming Banking Crisis, and Why Inflation Will Moderate

For most of last week (ending April 5th), financial markets were worried about the upcoming employment report, and when markets fret, the indexes languish. But after Friday morning’s “strong” (on the surface) employment report, those markets breathed a sigh of relief and reversed a major portion of the week’s losses. Still, the week ended showing […]

As Inflation Recedes, Will the Fed Act in Time?

The CPI for December was slightly hotter than expected, up +0.3% from November (which in turn only rose +0.1%). The market expectation was for a +0.2% number. As a result, the headline CPI, which looks back 12 months, kicked up to 3.3% in December from November’s 3.1% read. The Core CPI (ex-food and energy), however, […]

Upon Further Review – The Labor Market Is Cooling

On Friday (January 5th), once again, the Non-Farm Payroll (NFP) number (+216K) handily beat the +175K consensus estimate for December. Immediately after the release, equity markets, via the S&P 500, spiked +0.75% (35 points) to 4,721 from 4,686, as did bond yields with the 10-Year Treasury rising 8 basis points to 4.08%. But, by day’s […]

In 2024, Expect Lower Interest Rates & Lower Inflation

As we entered 2023, households were still flush with the cash from government handouts, the economy was healthy, the federal government was still running a significant deficit, and interest rates, while rising, had not yet been restrictive long enough to slow the economy. Real (inflation adjusted) GDP grew at an annualized rate of 3.0% for […]

The Fed: “We Don’t Talk About Rate Cuts – No! No! No!”

The title of this blog was inspired by Disney’s Encanto, a story about a family living in a charmed villa in the mountains of Columbia. Cracks begin to appear in the foundation of the grand villa, and it is Bruno, an ostracized family member, who holds the key to stop the foundation from crumbling. The […]

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 […]