feels like inflation may not be heading to zero that soon after all. median and super-core remain quite sticky and I still do not see anything that would drive them much lower.
I was looking through the data this morning, the monthly change in the price index without seasonal adjustments stood out - the latest print (Dec) makes it 3 months of a negative reading.
Could it be that this is a bump in inflations before an acceleration to the downside?
Ultimately, aside from the fact that none of us really know how it will evolve, the thing that I feel is ignored is that these things take a long time to move in whatever direction they are moving. certainly, it is very difficult in my mind to comprehend the idea that the Fed will cut 6 times this year based on what we have seen from the data. after all, 3.7% unemployment and 3.8% CPI are hardly conducive much looser policy. instead, I might argue another hike would be in store. but I'm just an FX guy trying to get by, so maybe the market is correct
and if we look away from the bright shiny economic numbers, a rate hike this year will most likely put/confirm Powell alongside Volker and out of any bracket that might associate him with Burns.
So whilst it's egotistical, I see no reason why Powell wont ensure his legacy.
feels like inflation may not be heading to zero that soon after all. median and super-core remain quite sticky and I still do not see anything that would drive them much lower.
I was looking through the data this morning, the monthly change in the price index without seasonal adjustments stood out - the latest print (Dec) makes it 3 months of a negative reading.
Could it be that this is a bump in inflations before an acceleration to the downside?
Today's note is inspired by your comment.
Ultimately, aside from the fact that none of us really know how it will evolve, the thing that I feel is ignored is that these things take a long time to move in whatever direction they are moving. certainly, it is very difficult in my mind to comprehend the idea that the Fed will cut 6 times this year based on what we have seen from the data. after all, 3.7% unemployment and 3.8% CPI are hardly conducive much looser policy. instead, I might argue another hike would be in store. but I'm just an FX guy trying to get by, so maybe the market is correct
and if we look away from the bright shiny economic numbers, a rate hike this year will most likely put/confirm Powell alongside Volker and out of any bracket that might associate him with Burns.
So whilst it's egotistical, I see no reason why Powell wont ensure his legacy.
you may well be right there. he has talked about Volcker a lot and he clearly wants to be seen in that light