Inflation

The Economic Week Ahead: August 28 - September 1

Aug 27, 2023 2 min read paid

Another fun-filled and data-packed week ahead. Hard to believe that the summer is almost over. That just gets us closer to a yearend stock market rally, but only if price and wage inflation rates continue to moderate, employment growth slows, and consumers stop binging. That's our outlook currently. We will get plenty of numbers this week which will either confirm or challenge whether we are still on the

Ed Yardeni

Dr Ed Answers Your Questions

Aug 24, 2023 2 min read

The following are some questions we have received in the comments section of our QuickTakes recently, and Dr Ed's brief answers: (1) Oaul S. asks: "Dr Ed, what's your response to inflationary concerns about a wage-price spiral triggered by big wage increases coming at UPS, and the prospect of labor unions negotiating similar wage spikes at Amazon and elsewhere?" Dr Ed says: "This

Ed Yardeni

Bond Yield Returning To Normal

Aug 21, 2023 2 min read paid

The 10-year US Treasury bond yield continued to rise today, yet stock prices rallied led by the MegaCap-8 stocks. The bond yield is returning to the levels seen prior to the period spanning the Great Financial Crisis (GFC) through the Great Virus Crisis (GVC) when the Fed kept interest rates abnormally low. And the stock market might be OK with bond yields returning to their old normal. Nevertheless, there might

Ed Yardeni

Bond Prices Go Drip, Drip, Drip

Aug 17, 2023 2 min read paid

The 10-year US Treasury bond yield rose above 4.00% at the beginning of August on better-than-expected economic data. It rose above last year's peak of 4.25% today, trading most recently at 4.32%, following the release yesterday of July's FOMC minutes, which strongly suggested that solid economic growth might keep inflation above the Fed's 2.0% target unless the Fed continues to

Ed Yardeni

China: Desperately Seeking a New Engine

Aug 16, 2023 2 min read paid

The Chinese are providing American consumers with cheaper goods. By doing so, the Chinese are increasing the purchasing power of American consumers, who are doing what they do best; they are shopping. It’s a gain for the US economy, which is getting better economic growth with lower inflation. It’s a loss for Chinese consumers, who are facing deflation and higher unemployment and dealing with the consequences of the

Ed Yardeni

Bond Vigilantes Running Into Some Resistance

Aug 14, 2023 2 min read paid

The 10-year US Treasury bond yield continues to run into resistance around 4.25%, which was last year's high (chart). The bond bears led by the Bond Vigilantes would like to see the yield rise well above that level to demonstrate that they are unhappy with the government's profligate fiscal policies. The bond bulls--including us, for now--see the current level as an attractive one if inflation

Ed Yardeni

The Economic Week Ahead: August 14-18

Aug 12, 2023 2 min read paid

This week is packed with July's composite cyclical indicator releases which should ease fears that economic growth might be too strong given that real GDP is tracking at 4.1% (saar) for Q3 currently. That's quite a reversal from a few months ago when there were widespread fears of a recession. Consider the following: (1) The YRI Earned Income Proxy for private-industry wages and salaries in

Ed Yardeni

Inflation Remains On Downward Trend

Aug 10, 2023 2 min read paid

The FOMC can take the rest of the year off. The federal funds rate is now restrictive enough to bring inflation down without causing a recession, in our opinion. The banking crisis in March, Moody's recent downgrade of several regional banks, and the Fed's latest Senior Loan Officer Opinion Survey all confirm that credit conditions are tightening. The economic data confirm that the economy remains resilient

Ed Yardeni

China Exporting Deflation to US

Aug 8, 2023 1 min read

The US doesn't have to experience a recession to bring inflation down if China's export prices are falling because China is already in a recession. Consider the following: (1) This evening we learned that China's CPI fell 0.3% y/y during July, the first such drop since February 2021. The PPI fell 4.4% over the same period (chart). (2) The CPI inflation

Ed Yardeni

The Economic Week Ahead: August 7-11

Aug 5, 2023 2 min read paid

Everyone hold your breath: The next BIG inflation number will be July's CPI (Thu). It could be troublesome for bonds and stocks. That's if the Cleveland Fed's Inflation Nowcasting is on track. It is updated each business day. On August 4, it projected that the headline and core CPI inflation rates will both be up 0.4% m/m. The comparable y/y inflation

Ed Yardeni

Upside Productivity Surprise Subdues Inflation, Maybe

Aug 3, 2023 1 min read

Wow! This morning's Q2 Productivity and Costs report was surprisingly good, but a bit hard to believe. Nonfarm productivity jumped 3.7% q/q (saar) as output increased 2.4% (the same as real GDP), while hours worked fell 1.3% (chart). The decline in hours worked is the first decline since Q2-2020 and was the result of a 1.3% decline in average weekly hours; employment was

Ed Yardeni

The Bull Deserves A Rest

Jul 27, 2023 2 min read

The bull market's winning streak ended today. The Dow closed higher for 13 straight sessions through Wednesday, its longest series of positive closes since 1987. It was down 0.67% today. The Dow's longest-ever winning streak was 14 sessions, set in 1897, according to S&P Dow Jones Indices. The S&P 500 closed at 4537.41 today after hitting a bull market intraday

Ed Yardeni

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