Core CPI

When Will The Fed Tighten Enough To Cause The Next Recession?

In trying to answer "When will the Fed tighten enough to cause the next recession", Deutsche Bank says that while current market expectations suggest the next recession (or at least the next Fed tightening that would be forceful enough to cause a recession) could still be many years away, the bank "thinks this is too optimistic." Here's why

Goldman Revises FOMC Forecast After Third Consecutive CPI Miss

After core CPI inflation was lower than expected for the third consecutive month, and the year-over-year rate fell two tenths to +1.7%, Goldman has made some changes to what it believes the Fed will report at 2pm today. It now expects the FOMC statement to include a stronger acknowledgement of the recent soft inflation data, and its expectations for the Summary of Economic Projections "have become incrementally more dovish."

Goldman: The Fed Will Hike But Here Are "The Two Most Interesting Questions"

While conceding that a hike is guaranteed, Goldman notes that two issues should make this week's FOMC meeting particularly interesting. First, will Fed officials alter their policy views in response to the increasingly different signals that both sides of the mandate are sending about the urgency of further tightening? Second, will the press conference provide some clarity on what the next tightening step following the June hike will be?

Global Markets Rebound As Tech Rout Ends; Sterling Rises

As the Fed begins its two-day meeting, global stocks have recovered their footing and European shares rise, led by a bounce in tech stocks as last Friday's global selloff that started in the sector shows signs of abating. Asian stocks and U.S. futures gain as investors turn their attention to today's Jeff Sessions testimony as well as tomorrow's barrage of macro data including Yellen, CPI and retail sales.

Key Events In The Coming Busy Week: Fed, BOJ, BOE, SNB, US Inflation And Retail Sales

After a tumultous week in the world of politics, with non-stop Trump drama in the US, and votes in the UK, France and Italy, this is shaping up as another busy week ahead with multiple CB meetings, a full data calendar and even another important Eurogroup meeting for Greece. Wednesday's FOMC will be the main event, with the Fed expected to hike 25bp, while the BOJ, BOE and SNB all remain on hold.

Quiet Month End Markets Hide "Below The Surface" Fireworks

It has been another quiet session for global equity markets, with S&P futures flat, as are European and Asian stocks, which is perhaps odd, as there was quite a bit of newsflow and, in the case of China, outright fireworks.

Albert Edwards: "What On Earth Is Going On With US Wages"

"What on earth is going on with US average hourly earnings (AHE)? Three consecutive Employment Reports have seen this key measure of wage inflation surprise by its weakness. I feel especially foolish as I had written that wages were set to accelerate sharply" - Albert Edwards

JPM Cuts 10Y Yield Forecasts "Significantly Lower" Due To Weaker Inflation Outlook

Just one day after Goldman reluctantly cut its 2017 year end forecast on the 10Y yield, it was JPMorgan's turn, and over the weekend JPM announced it was adjusting its US rate forecast "significantly lower", slashing its year end 10Y yield target to 2.75% from 3%, reflecting “a weaker outlook on core inflation and reduced expectations around tax reform and infrastructure spending.”

Trumpquake: Futures Wipe Out Month's Gains In One Session, VIX Spikes

Growing concerns over the turmoil engulfing President Donald Trump’s administration weighed on risk appetite, sending global stocks and US futures lower, pressuring the dollar while boosting yen, gold and VIX. The sharp drop has seen the gains over the past month wiped out in one session.

Goldman Turns Less Confident On June, September Rate Hikes

"the risk to our near-term funds rate view is now slightly greater, largely because the range of plausible outcomes has widened. We have shaved our subjective odds of a June rate hike to 80%, from 90% earlier, and have also become a bit less confident in a September hike" - Goldman

The Great Shadow Unwind: Chinese Entrusted Loans Post First Decline In 10 Years

What was the most notable revelation in the overnight Chinese loan data was the "entrusted loans" category, (the broadest proxy for ‘shadow financing’) which confirmed China's recent crackdown on shadow banking, and posted the first contraction in a decade, going all the way back to 2007.