Inflation

US Disinflation Is Made In China

Jul 13, 2023 2 min read paid

It's not quite the great fall of China. However, something is definitely wrong with China's economy. June's trade data showed that Chinese exports fell sharply for the second month in a row and imports have remained flat since mid-2021 (chart). It was widely expected that the end of the government's pandemic lockdowns late last year would boost economic activity in China and

Ed Yardeni

June's CPI Was Cool

Jul 12, 2023 2 min read paid

Ed Yardeni

Sunny Day

Jul 10, 2023 1 min read paid

Today was a sunny day for stocks and bonds following a few stormy days. That's even though two Federal Reserve district bank presidents (Daly & Mester) said that inflation remains too high and more rate hikes will probably be necessary to bring it down. On the other hand, another one of them (Bostic) said the Fed's "policy right now is clearly in the restrictive territory.

Ed Yardeni

The Economic Week Ahead: July 10-14

Jul 8, 2023 2 min read

This week is jampacked with June's inflation indicators. On balance, they should show that inflation continues to moderate. On Monday, the FRBNY survey of consumer inflationary expectations should decline from May's 4.1% for the one-year-ahead and 3.0% for the three-years-ahead readings. The price of gasoline has a big impact on these expectations, and it was down 26.5% y/y during the four weeks

Ed Yardeni

Eurozone Is In a Recession

Jun 26, 2023 2 min read

Greetings from Dubrovnik! My wife and I started our vacation in Croatia last Thursday. We will be back in the USA this coming Thursday. We started our trip in Zagreb for one day and Split for three days. Now we are in Dubrovnik for the rest of our stay. Croatia is beautiful and attracts lots of tourists this time of year. Tourism is the biggest industry here but it is

Ed Yardeni

The Economic Week Ahead: June 26-30

Jun 24, 2023 2 min read paid

May's personal income will be released on Friday. It is likely to be the week's most important economic indicator. It should show that consumers' incomes continue to grow, while inflation is still moderating. We know that our Earned Income Proxy for private wages and salaries in personal income rose to a record high in May (chart). We also expect to see that receipts of unearned

Ed Yardeni

Core Inflation: The True Story

Jun 18, 2023 2 min read paid

A few of our QT members asked us to explain why core CPI inflation, which has been so sticky over the past year, should moderate over the rest of this year. The headline CPI inflation rate has dropped significantly since last summer from around 9.0% to 4.0% in May (chart). But the core inflation rate has been stuck around 6.00% since early last year. The core CPI

Ed Yardeni

A Hawkish Skip at the Fed

Jun 14, 2023 2 min read paid

In this past Sunday's QT, we wrote: "On Wednesday, Fed Chair Jerome Powell will update us on the committee's latest views. Odds are the FOMC will skip another rate hike, but hint that rate hiking might not be over." Sure enough, the FOMC skipped and the committee's statement noted: "Holding the target range steady at this meeting allows the Committee to

Ed Yardeni

Inflation Shock Continues to Abate

Jun 14, 2023 2 min read

The pandemic was a shock. It caused lots of aftershocks including an inflation problem which was widely expected to be transitory, but has seemed to be more persistent. It may turn out to be transitory after all according to today's May PPI report. We usually focus on the inflation rate of the final demand PPI for personal consumption (chart). It tends to coincide with the inflation rates for

Steve Rybka

The Bull Was Pleasantly Surprised by May's CPI Today

Jun 13, 2023 2 min read paid

Stock prices rallied from the open today on May's CPI report. It wasn't surprisingly good. But investors and traders feared that it might be surprisingly bad. That's been the modus operandi of this bull market since October 12. It's been rallying on all the bad things that aren't happening. So far, there's been no recession, no earnings collapse,

Ed Yardeni

The Economic Week Ahead: June 12-16

Jun 10, 2023 2 min read paid

This will be a head spinning week. It could also be another rollercoaster ride in the financial markets. Maybe we should go on vacation and come back on Friday following the deluge of economic indicators from Monday through Thursday, and a FOMC meeting on Tuesday and Wednesday to boot. May's CPI will be released on Tuesday morning just as the FOMC convenes for a two-day meeting, which will

Ed Yardeni

China's Post-Lockdown Recovery & Stimulus Disappoint

Jun 8, 2023 2 min read paid

The Chinese government started to lift its pandemic lockdown restrictions in early December last year. The economic rebound has been weaker than widely expected. Indeed, China's imports have been flat at a record high since mid-2021 and have remained so through May of this year (chart). Furthermore, inflation has been nonexistent as the Chinese CPI rose just 0.1% y/y in April, while the country's

Ed Yardeni

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