Powell’s Patience and Policy Review

“As long as it takes” Jerome Powell was back on the mic this week in his official capacity, with the Fed concluding its March meeting. The FOMC decided to keep rates the same and demurred on the question of the SLR (only to announce today that the exemption would be allowed to expire at the […]

Inflation, Swimming Pools and Drunk Walks

This week was once again a whirlwind of policy and data with inflation and yields in the epicenter. The NFIB’s survey of small businesses showed the highest number of businesses reporting higher prices since 2008 and their commentary affirmed that “low inventories and solid sales are expected to present more opportunities to raise prices”. However, […]

Dual Mandate

“Still a long way from our goals” With bond yields continuing to rise and equities wobbling, all eyes were once again on Jerome Powell this week. A week after 10-year Treasury yields rose to the highest levels since the beginning of 2020, Powell spoke at a Wall Street Journal Jobs Summit and addressed many of […]

Supply Chains, Worrying, and Convexity

“They have never seen such chaos” We’ve been following auto manufacturers for some time as a canary in the coal mine for US supply chains, and this week, Tesla joined the list of “idlers”, announcing it will “temporarily halt some production at its car-assembly plant in California”. This shouldn’t be all too surprising considering the […]

Retail Sales and Inflation

Spent “like it burned a hole through their pocket” This week saw the release of a variety of new data that surprised in a big way. One of these data series is Retail Sales. The January data clocked an increase of 5.3% month on month, admittedly being helped by a downward revision of December’s figure, […]

Survey Says…

When it comes to making predictions about the economy (or the future), even the pros can have a hard time. As Jerome Powell said in the January FOMC Press Conference “the path ahead remains highly uncertain”. But while it may be dangerous to rely on the wisdom of crowds, this week we can turn to […]

One-Offs and Inflation Chorus

“Not quite” Last week, we highlighted Powell’s comments on inflation and how the projected inflationary pressures were not expected to be “either lasting or particularly large”. This week the tradition of “looking through” changes in inflation continues, this time in regard to the HICP. (Aside: Super Mario is making headlines again with his recent (re-)entry […]

CV-19, Lockdowns, and Inflation

“More undetected cases” The news this week has been dominated by the retail investor “slugfest” and its fallout. But, while the antics of Redditors may be the flavor du jour, CV-19 continues to make headlines. Public health officials have confirmed that the South African strain, which was worrying both for its infectiousness and its evasive […]

Heroes and Villains

“Too early to think we have this virus beat” With another week has come another round of headlines about the various heroes and villains in the CV-19 “battle”. While just last week there was heavy discussion about the various new strains popping up across the globe, there’s more news this week, with preliminary data showing […]

What are the odds?

“We have no time to waste” This week the odds of additional stimulus are looking even better. Biden and his team recently announced a $1.9 trillion “American Rescue Plan” that includes much of what we discussed last week, including direct payments to households, extending and increasing unemployment benefits, eviction and foreclosure moratoriums, and rental relief. […]