The stubborn inflation the Fed can't shake
Core PCE inflation ran at 4.6 per cent year-on-year in May, and Federal Reserve officials can think of little else.
Economy
Britain's mortgage crunch returns
Two-year gilt yields have risen above five per cent because UK core inflation will not come down, and mortgage rates have followed them to levels last seen in the global financial crisis.
What the Fed's forecasts really say
The Federal Reserve held its benchmark rate in June but raised the median projection for where rates will peak to 5.6 per cent.
The Fed wants to pause without looking soft
Headline inflation has slowed to 4.0 per cent year-on-year, which gives the Federal Reserve a reasonable case for pausing its rate increases at the June meeting.
The jobs report that disagrees with itself, again
Non-farm payrolls rose by 339,000 in May, well above a consensus that had expected a gentle slowdown.
Nobody can agree how much savings Americans have left
The Federal Reserve Bank of San Francisco reckons that about $500 billion of the $2.1 trillion in excess pandemic savings is left, and that it will be spent by late summer.
Why core inflation stopped falling
Headline consumer prices rose 4.9 per cent in the year to April, the first reading below 5 per cent in two years.
Is this the Fed's last hike?
The Federal Deposit Insurance Corporation seized First Republic Bank in the early hours of 1 May and sold most of its assets and deposits to JPMorgan Chase straight away.
Tighter loans today, more defaults tomorrow
A net 45 per cent of American banks were tightening credit in the Federal Reserve's January Senior Loan Officer Opinion Survey (SLOOS), and that was before the March banking panic.
China is spending again. Its property market isn't
China's economy grew at a respectable 4.5 per cent annual pace in the first quarter, lifted by a sharp rebound in retail spending, restaurants and domestic travel after the end of zero-Covid.
Watching deposits leave in real time
March payrolls rose by a healthy 236,000, but the Federal Reserve's weekly H.8 release showed deposits still pouring out of small and mid-sized banks.
OPEC just made the Fed's job harder
OPEC+ surprised oil markets on Sunday, 2 April, by announcing a production cut of 1.16 million barrels per day.
Are bank failures doing the Fed's job for it?
Emergency Fed lending to banks is approaching $300 billion, according to the central bank's H.4.1 release, and that has undone months of quantitative tightening in a matter of days.
The Fed's quiet bailout of banks' bad bond bets
Banks borrowed a record $152.9 billion from the Federal Reserve's discount window, according to the H.4.1 balance-sheet release published on Thursday, 16 March.
Powell signals bigger hikes are back
Jerome Powell told the Senate Banking Committee that the Federal Reserve is ready to go back to rate rises of 50 basis points if the economic data stay hot.
When the data changes after the decision
Core personal consumption expenditures (PCE) prices rose 0.6 per cent in January, lifting the annual rate to 4.7 per cent and giving policymakers at the Eccles Building a nasty surprise.
Did shoppers really spend 3% more in January?
US retail sales jumped 3.0 per cent in January from December, ending talk of an imminent consumer slump and sending economists back to their growth models.
Special Report
Valentine's Day: Markets still love rate cuts. The Fed doesn't love them back
January's consumer prices rose at a 6.4 per cent annual pace, the Bureau of Labor Statistics said on Valentine's Day, and markets' eighteen-month infatuation with Federal Reserve rate cuts was once again shown to be one-sided.
Last year's inflation just got rewritten
On 10 February the Bureau of Labor Statistics published its routine annual seasonal revisions to the consumer price index, and in doing so rewrote the inflation record for late 2022.
517,000 jobs and the end of the rate-cut dream
The Bureau of Labor Statistics reported 517,000 net new payroll jobs for January, and the unemployment rate fell to 3.4 per cent, its lowest since May 1969.
Meta's new growth story: buying back its own shares
Meta Platforms reported bland fourth-quarter revenue and a lacklustre outlook, and its shares rose 23 per cent in a day, adding roughly $90 billion of market value in a few hours.
The economy grew 2.9%. Demand barely grew at all
The advance estimate put fourth-quarter US GDP growth at 2.9 per cent annualised, comfortably ahead of forecasts, and commentators were quick to praise the economy's resilience.
The inflation number the Fed secretly cares about
US consumer prices rose 6.5 per cent in the year to December, confirming that headline inflation is coming down from its summer peak.
Tech's layoffs are really about profits
Amazon announced 18,000 corporate layoffs as 2023 began, following similar cuts at Meta, Salesforce and Alphabet.
Special Report
New Year: Everyone expects a recession. That's the warning sign
About 65 per cent of economists surveyed at Wall Street banks and independent research firms expect a US recession within the next twelve months, and that degree of agreement should worry any experienced investor as 2023 begins.
Is the recession alarm broken?
The gap between 10-year and 3-month US Treasury yields inverted in late 2022 to depths not seen in four decades, pushing the New York Federal Reserve's recession probability model towards 38 per cent.
How long can shoppers keep spending their pandemic savings?
Consumer spending held the US economy up through 2022, in the face of the fastest monetary tightening in forty years.
The Fed and the market disagree. Someone is wrong
The Federal Open Market Committee raised its policy rate to a range of 4.25 to 4.50 per cent in December and published projections showing a peak of 5.1 per cent in 2023.
Goods are getting cheaper. Services aren't
US consumer prices rose 7.1 per cent in the year to November, and markets took the figure with relief, mainly because core goods prices fell outright by 0.5 per cent on the month.
Wages are rising — by how much depends on who you ask
Average hourly earnings rose 0.6 per cent in November, a strong monthly gain that sent bond-trading algorithms onto the defensive.
China reopens, and the world gets a new inflation problem
Markets have decided that China's eventual exit from zero-Covid will be pure good news for global inflation.
Special Report
Cyber Monday: What the discounts say about inflation
Americans spent an estimated $11.3 billion online on Cyber Monday 2022, according to Adobe Analytics, a record in nominal terms for the annual shopping day.
Special Report
Black Friday: Shop now, pay later, default sooner
US credit card balances reached $930 billion in the third quarter of 2022, according to the Federal Reserve Bank of New York's latest household debt report, up fifteen per cent on a year earlier.
The bond market is screaming recession
The gap between two-year and ten-year US Treasury yields reached minus seventy-five basis points in late November 2022, the deepest inversion since Paul Volcker was crushing inflation in the early 1980s.
Rents are already falling. Official data hasn't noticed
The shelter index in the US consumer price report rose 0.8 per cent in October, its steepest monthly rise in more than three decades, and no single line in the American economic data is doing more to mislead.
One good inflation report does not make a trend
Headline US inflation came in at 7.7 per cent for October, down from 8.2 per cent in September, and core inflation eased to 6.3 per cent.
Why slowing down could mean the Fed goes higher
Interest-rate futures are pricing a fourth consecutive 75-basis-point rise at the Federal Open Market Committee's November meeting, which would take the policy rate to 3.75 to 4.00 per cent.
Two jobs reports, two stories. Which one matters?
Non-farm payrolls rose by a steady 263,000 in September, evidence that American companies are still hiring briskly.
The inflation the Fed can't fix: your haircut and your dentist
The August consumer price index showed core prices up 0.6 per cent on the month, and with it the limits of monetary policy.
Don't bet on inflation falling just because the maths says so
Equity traders are treating a slowdown in the statistics as if it were a truce in the economy.
The Fed has found its cheapest weapon: going big early
The Federal Reserve has found that speed is cheap. By front-loading its rate rises, delivering the big increases at the start of the tightening cycle, it hopes to reduce the total cost of the adjustment that follows.
