Thoughts From The Divide – The Driver’s Seat

Compared to some of the wilder FOMC meetings we’ve seen in the recent past, this week’s was relatively tame. Yes, Powell admitted that inflation was running “well above” the two percent target but said, “we have some ground to cover on the labor market side”. Additionally, while there were “questions around MBS” amid the hot […]

Thoughts From The Divide – Surveying Surveys

“Activity surged” The latest Regional Fed surveys have continued the recent “business as usual” of elevated activity, price pressures, and strong employment readings. The Philadelphia Fed’s Manufacturing Business Outlook Survey showed strong but less aggressive growth. Respondents’ feedback “continued to suggest ongoing growth in the region’s manufacturing sector”, and “general activity, new orders, and shipments […]

Thoughts From The Divide – Housing Relief?

“Still very much tilted in sellers’ favor”  In last week’s TFTD we took a look at housing, where the latest CoreLogic Case Shiller Home Price report was making headlines with the largest gains in certain metrics in over 30 years. This data did, however, come with the caveat that it was from April and perhaps somewhat behind […]

Thoughts From The Divide – The Return to “Normal”

“A semblance of normality could take years” Like labor tightness, inflation is now squarely in the known knowns and the question has shifted to wondering when price pressures and supply shortages will end. The ISM’s latest data, which covers June, says “not yet”. The ISM Prices Index hit the “highest level since July 1979” and […]

Thoughts From The Divide – It’s Relative

“Deploy a number of different strategies” At this point, the tightness of the labor markets falls into Rumsfeld’s “known knowns” with this week’s Kansas City Fed Manufacturing survey joining the parade of regional Fed surveys showing tight labor markets and supply shortages. But taking the current labor market tightness as a given (at least for […]

Thoughts From The Divide – No One Knows

“No one knows with any certainty” As Lisa Abramowicsz put at the start of her interview with John Authers, there was “one and only topic” this week: the FOMC meeting. The infamous dots and general tone were taken as hawkish and markets did not shrug off the meeting and press conference like they had the […]

Thoughts From The Divide – Heady Inflation and Consumer Response

“Neither easy nor smooth” This week’s Headline CPI print was 5%, the “highest since the summer of 2008” and Core CPI was 3.8%, “the sharpest increase in nearly three decades”. Breaking it down into the subcomponents, CNBC noted that “prices surged across a variety of sectors”. Unsurprisingly, one of the more impressive moves was the […]

Thoughts From The Divide – Constrained Growth, Again

June 4, 2021 “Overcoming labor obstacles” While inflation may have been the center of attention over the last few weeks, the second part of the Fed’s mandate, employment, was in the spotlight this week. Market participants were expecting May payroll numbers to significantly gain on April levels and match the enthusiasm that the recent inflation […]

Thoughts From The Divide – PCE and Policy Moves

May 28, 2021 “Actually a good sign” There’s more piping hot inflation data out today, with both Headline and Core PCE coming in above forecasts and both carrying a three handle. Despite beating expectations, PCE didn’t blow the doors off in the way that some of the CPI data did. And though Core PCE, which […]

Thoughts From The Divide – Global Problems and Housing’s Temperature

May 21, 2021 Limited Spillover While our coverage of supply chain problems, logistical issues, and inflationary pressures has tended to focus on the US, they certainly aren’t localized phenomenon. Case in point, the apple cart that is Chile’s copper industry appears to be under threat of upset. The industry is facing several potential problems, including […]