How The Bond Market Learned To Love The Fed

The bond market is abiding the Fed. The market had already priced itself out of the multiple rate cut fantasy. The Fed’s base case view continues to be that growth will maintain a steady pace while inflation gradually gets back to the 2 percent target. Jay Powell downplayed the possibility of stagflation.

Chart Of The Week: The Softening Labor Market

The latest JOLTS report showed the lowest levels of quits since early 2018 when Core PCE inflation was around 2%. The quit rate is a good measure of labor market tightness. The disinflationary trend that was dominant in 2023 is still very much intact.

Too Early To Call Stagflation

Home Market Outlook Economy Analysis Too early to call Stagflation. Economic growth in the first quarter came in at 1.6 percent, well below expectations. But inflation is stuck on a plateau, and the Fed is not likely to raise interest rates, says John Sutter. Sutter says stagflation was a buzzword in the 1970s.

Above The Noise: Is Inflation Obsession Overblown?

Weekly Report: what happened at UBT last week (0422-0426)?

Inflation Declined In March, But Remains High

Inflation Declined In March, But Remains High. Inflation remains well above the Fed’s 2-percent average inflation target. Core inflation, which excludes volatile food and energy prices, also remained elevated. The latest numbers will do little to sway members of the Federal Open Market Committee.

Is The Hot Inflation Data In Q1 Noise Or Signal?

The Turn Is Coming

The 10yr minus 3mo Treasury rate is moving higher at a rapid pace. 88% of portfolio managers in the Bank of America Fund Managers Survey last week believed lower rates were ahead. I believe we are seeing a long-awaited turn away from the single focus of high tech as the only option for investors. Positive economic activity is the primary driver of the 10yr Treasury rate and core industrials.

U.S. Economic Growth Plunges In First Quarter 2024

Home Market Outlook Economy Analysis U.S. Economic Growth Plunges In First Quarter 2024. The release of 1st quarter 2024 Gross Domestic Product surprised virtually all forecasters. The first three months of 2024 were characterized by a notable deceleration in US economic growth, marking an almost two-year low.

U.S. Inflation Not As Bad As Feared, But Still Too Hot

U.S. Inflation Not As Bad As Feared, But Still Too Hot in the first quarter. The core PCE deflator came in at 0.3% month-on-month, up from 0.2%. Inflation is still too hot and September remains the earliest opportunity for an interest rate cut.

Fed Likely To Hold Rates Steady And Warn Of The Risk Of Delay To Cuts

Inflation and strong activity and jobs numbers have pushed the timing of the first interest rate cut to December. The Federal Reserve will remain wary and signal that if inflation stays high, so will interest rates. ING sees an opportunity for a September rate cut. The Fed likely to hold rates steady and warn of the risk of a delay to cuts.

GDP Update: Moderate Growth And Disinflation Continue

Real GDP is growing at about a 2.2% annual pace. On a year-over-year basis, the deflator rose only 2.4%. The economy today is about 20% smaller than it could have been. Calafia Beach Pundit sees no reason to worry about a near-term recession.

M2 Still Points To Lower Inflation

U.S. GDP Growth Slows Markedly, And Inflation Remains The Focus

U.S. GDP growth slowed to 1.6% annualised in the first quarter of this year. But inflation is hotter than expected, with the core PCE deflator up 3.7%. Inflation makes a near-term Federal Reserve interest rate cut look less likely. First quarter GDP growth is well below the 2.5% consensus.

Money Supply Sees Major Jump In Recent Weeks

Money Supply Sees Major Jump In Recent Weeks. Money Supply should dip some heading into the summer before rebounding later in the year. The large increase in seasonally adjusted Money Supply occurred in March. The drop in reverse repos is driving Money Supply and the stock market higher.

Weekly Report: what happened at UBT last week (0415-0419)?

Rate Cut Forecast Now Seen For September At Earliest

Belated March CPI Analysis

Rate Volatility's Market Implications

Higher-For-Longer Risk For Rates Drives Up Treasury Yields