I will start today where I ended Monday’s note. Here is a quick excerpt from the final paragraph in order to refresh your memory: The real risk ahead for the market is just more Fed uncertainty. Who is coming next? How will a newly reconfigured FOMC interact with the...
Last Wednesday during the FOMC press conference, Jay seemed a bit off. He hardly mentioned the word transitory. He barely spoke about the millions of jobs missing since Feb 2020. And he never once highlighted the long-term disinflationary forces still facing the US...
The current debate on inflation is far from over. Those in the transitory camp, like me, who believe long-term disinflationary trends will reassert themselves as the short-term COVID-induced supply disruptions dissipate, can certainly take comfort from the last two...
As promised, here are a few thoughts on housing valuations and inflation. First up, have a look at the following chart: It shows the total value of the US housing stock relative to GDP versus PCE inflation. Think of this as the equivalent of the Buffett chart for the...
Today I want to spend some time reviewing last week’s massive payroll forecasting miss, and the market’s collective yawn in response. Among over 70 professional economists polled by Bloomberg, the lowest expectation for the August payroll number was +400k. Even if we...
Please take one minute from your day and read the following three excerpts from Jay’s JH speech today. They are pure unadulterated dovishness: “We have much ground to cover to reach maximum employment, and time will tell whether we have reached 2 percent inflation on...
In last Friday’s note I highlighted the following two statements from the recent FOMC minutes: “Some participants saw the incoming data as providing a less clear signal about the underlying economic momentum and judged that the Committee would have information in...
Yesterday the Fed announced that Jay will be speaking virtually at Jackson Hole next Friday. The conference is technically scheduled to be an in-person event, so his decision to skip all the usual festivities is no doubt a serious blow to the organizers. And for the...
I do not normally write on individual economic data releases unless I believe they contain meaningful information about longer-term trends in financial markets. In fact, I pride myself on having one of the lowest-frequency economic focal points of any market...
July 2021 payroll employment levels came in around 5.7m lower than the February 2020 peaks. In percentage terms, that implies the current workforce is about 4% smaller than its pre-pandemic level. And just to reiterate a point I have stressed in these notes for many...
July 2021 payroll employment levels came in around 5.7m lower than the February 2020 peaks. In percentage terms, that implies the current workforce is about 4% smaller than its pre-pandemic level. And just to reiterate a point I have stressed in these notes for many months now, we now have far fewer workers producing record amounts […]
