More Good Inflation News: David Berson's Economic Brief

Inflation Remained Low In June

Rates Spark: Euro Rates Eyeing Quicker ECB Cuts

Rates Spark: Weak PMIs Help Build The Case For Rate Cuts

Weaker eurozone PMIs have helped markets price in two more ECB rate cuts for 2024. US manufacturing PMI slipped back below 50 and new home sales weakened, but services PMI edged higher. We continue to view the environment as prone to more risk-off, higher volatility and lower market rates.

Rates Spark: Why September Looks Like A Good Month For An ECB Rate Cut

Rates Spark: Markets Are Still Digesting Biden's Departure

US Biden's withdrawal did not have a material impact on EUR rates. The biggest impact for Treasuries was a late-in-the-day rise in yields. Weaker growth data later this week should help the EUR curve steepening. The ECB's Survey of Monetary Analysts shows a well-anchored ECB terminal rate of 2.25%.

Weekly Report: what happened at UST last week (0715-0719)?

Has The Neutral Rate Of Interest Increased?

Rates Spark: Lagarde Clear About Not Committing To Cuts

Rates Spark: ECB Unlikely To Satisfy Doves

European Central Bank is not likely to cut at this meeting and will likely refrain from committing to future cuts. Markets are already pricing in two more 25bp cuts for this year. In the US, the momentum is stronger towards a rate cut. In France, the political challenges continue to evolve but markets remain unmoved.

Yield Advantage: Key Takeaways From PIMCO's Secular Outlook

Central banks have achieved disinflation. Real yields are at levels not seen in 15 years. Fiscal policy in the US and abroad is on an unsustainable path. We're in a world of elevated macro and geopolitical risk. PIMCO: There's a yield to be seized and a yield advantage.

Rates Spark: Pricing Of ECB Cuts Facing Limits

Market pricing for 2024 ECB cuts looks stretched. Markets are now pricing in 48bp of ECB cuts in 2024, just shy of two full 25bp cuts. Three UK rate cuts still on the table this year. The Fed’s Beige Book is scheduled for later today.

Rates Spark: Trump Assassination Attempt Contributes To Steeper Curves

Chart Of The Week: Treasury Yield Curve Signaling 'All Clear'

Home Market Outlook Economy Analysis Chart Of The Week: Treasury Yield Curve Signaling 'All Clear' ahead of many recessions in US economic history, the yield curve has gone negative - or "inverted" The 2-10 spread between the 10-year and 2-year yields is now at minus-27 basis points. The MoneyShow Chart of the Week for July 15, 2024 is Mike Larson's chart of the week.

Markets Confident That Rate Cuts Will Start In September

Markets Confident That Rate Cuts Will Start In September. Fed funds futures are now pricing in a high probability that the central bank will start cutting rates at the Sep. 18 FOMC meeting. Tomorrow’s US retail sales report for June. Signs that the US economy is slowing is another factor that supports a dovish pivot for monetary policy.

Weekly Report: what happened at UST last week (0708-0712)?

Mortgage Rates Are Likely To Decline In The Near Future

In June 2024, the 30-year fixed rate mortgage rate was around 6.9 percent. Inflation will eventually return to 2 percent per year. Lower long-term Treasury rates and lower spreads in the near future will translate into lower mortgage rates. Mortgage rates are likely to be lower in the future.

Beneath The Skin Of CPI Inflation: Historic Plunge In Durable Goods Prices, Plunge In Gasoline, And Outliers In Services

Consumer Price Index for June was pushed down by plunging gasoline prices, plunge in prices of durable goods, and outliers in services. In June, core services prices rose at the smallest pace since the summer of 2021. The CPI fell by 4.1% year-over-year in June, the biggest drop since 2003.

Soft U.S. Inflation Boosts Confidence In A Return To Target

In Search Of The Elusive Neutral Interest Rate