Investing.com (August 9)
“Inflation expectations among consumers in the U.S. have plunged, falling at the fastest rate ever in the history of the New York Federal Reserve’s monthly Survey of Consumer Expectations.” The July survey revealed “consumers expect inflation to rise 6.2% over the next year and 3.2% over the next three years,” down considerably from 6.8% and 3.6% in June’s survey.
Wall Street Journal (August 2)
“Bearish investors aren’t buying into hopes that July’s rapid advance for stocks heralds the start of a new bull market. If anything, they say the worst might be yet to come as inflation remains high, the Federal Reserve plans more interest-rate increases and stocks trade at valuations that still don’t look cheap.”
Tags: Bearish, Bull market, Fed, Hopes, Increases, Inflation, Interest rate, Investors, July Stocks, Valuations
Reuters (July 14)
“After staring parity against the dollar in the face for days, the euro finally broke the key level.” The immediate cause was surging U.S. inflation, which strengthens “the case for a supersized 100 bps rate hike by the Federal Reserve” should it choose to follow the Bank of Canada, which “paved the way” with “the first 100-basis-point rate increase among the world’s advanced economies in the current policy-tightening cycle.”
Tags: 100 bps, Advanced economies, Bank of Canada, Dollar, euro, Fed, Inflation, Parity, Policy-tightening cycle, Rate hike, Surging, U.S.
Wall Street Journal (July 13)
“U.S. consumer inflation accelerated to 9.1% in June, a pace not seen in more than four decades, adding pressure on the Federal Reserve to act more aggressively to slow rapid price increases throughout the economy.” But there are also reasons to think inflation will be coming down as “investor expectations of slowing economic growth world-wide have led to a decline in commodity prices,” consumer spending is shifting, and excess inventory has retailers warning “of the need to discount goods, especially apparel and home goods.”
Tags: 9.1%, Aggressively, Commodity prices, Consumer spending, Discount, Economy, Excess inventory, Expectations, Fed, Growth, Inflation, Investor, June, Price increases, Retailers, Slowing, U.S.
Mansion Global (July 11)
“The market has cooled since June, when the Federal Reserve raised interest rates 0.75% to help curb inflation.” Housing inventory is rising, “finally giving buyers some options and negotiability with sellers.” As a result, “nearly 15% of home contracts in the U.S. were canceled in June,” which had approximately 60,000 cancellations. That’s up 12.7% over May and 11.2% year on year.
Tags: Buyers, Contracts, Cooled, Fed, Housing inventory, Inflation, Interest rates, June, Market, Negotiability, Options, Sellers, U.S.
Bloomberg (June 30)
“The Federal Reserve is cooling off the red-hot housing market as it fights to curb inflation by driving up interest rates.” The ensuing “housing slowdown is helping to solve the US real estate market’s most intractable problem: tight inventory.” New sellers are entering the market at a faster pace while there are “fewer buyers competing.” As a result, “the number of active US listings jumped 18.7% in June from a year earlier, the largest annual increase in data going back to 2017.”
Tags: Buyers, Cooling off, Fed, Housing market, Inflation, Interest rates, Intractable, Inventory, Listings, Real estate, Red-hot, Sellers, Slowdown, U.S.
Market Watch (June 27)
“Stock futures are inching higher at the start of the week as investors seemingly cling to newfound optimism that a bond rout is ending, and the Fed’s rate-hike plans will get pruned due to a global slowdown.” There are, of course, no shortage of issues like surging inflation, but Brynne Kelly suspects “the next black swan for markets could be failing power grids and electricity shortages.” These could prove “catastrophic” as we move into the “height of the summer cooling season amid rising temperatures.”
Tags: Black swan, Bond rout, Catastrophic, Electricity, Fed, Inflation, Investors, Kelly, Markets, Optimism, Power grids, Rate hike, Shortages, Slowdown, Stock futures, Summer
Wall Street Journal (June 27)
“Workers throughout the economy are demanding bigger raises to compensate for soaring prices. This could push inflation higher as companies pass along higher wage costs in the price of goods and services.” Though bond markets haven’t determined “how serious the Fed is about controlling inflation… workers aren’t waiting to find out as they seek higher pay.”
Tags: Bond market, Compensate, Demanding, Economy, Fed, Goods, Inflation, Pay, Raises, Services, Soaring prices, Wage costs, Workers
Wall Street Journal (June 16)
The Federal Reserve Board’s 75-point increase “was supposed to signal shock and awe, and it was the Fed’s first move of that magnitude since 1994.” Though the Fed is “front-loading its rate increases,” it does not realize the need to “go all that high to beat inflation.” The current forecast calls for a fed-funds interest rate of only 3.4% by year end. “That means increases will taper off through the rest of the year, and the Fed predicts a peak of only 3.8% in 2023.”
Tags: 1994, 2023, 3.8%, 75-point, Awe, Fed, Forecast, Front-loading, Inflation, Interest rate, Peak, Rate increases, Shock, Signal, Taper
Bloomberg (June 15)
The Federal Reserve “must do more than raise rates by 75 points.” It needs to “regain control of the inflation narrative to avoid inflicting more economic damage and to restore its credibility.”
Tags: 75 points, Credibility, Economic damage, Fed, Inflation narrative, Raise, Rates, Regain control, Restore
