Macro FED’s preferred inflation gauge – Core PCE is expected to end the year at 2.6%. J. Powell said 3 inflation prints from the second quarter added confidence that the inflation rate is moving toward the FED’s target. As inflation came down better than FOMC expected, it is no longer a major concern, allowing the FED to have a more balanced focus on their dual-mandate view. Powell explicitly stated that…

Macro PPI came slightly hotter than expected. However, the Consumer Price Index (CPI) for June 2024 reported an annual inflation rate of 3.0%, indicating continued moderation from the previous months​. While food prices increased by 2.2%, energy prices saw mixed trends, with a decline in gasoline prices by 2.5% but an increase in electricity and natural gas prices by 4.4% and 3.7%, respectively. Consumer spending has been robust, driven by…

Macro Friday’s payrolls show gains of 206k (vs. 188k estimate), a touch stronger than 190k expected. Cyclical employment has only risen by 55k, as 70k of the increase comes from government jobs and 82k from healthcare and private assistance. However, May and April’s data were revised significantly by a combined 111k jobs. The job growth was initially exaggerated as the business failures and closures were not fully captured in the…

Macro Core PCE (Personal Consumption Expenditure, which strips out volatile food and energy items) rose by just 0.08% in May, the least since late 2020. Wages rose by 0.7% and real disposable income by 0.5%, while savings rates rose by 3.9%. The economy is normalizing with a balanced job market, persistent growth and moderating inflation. This result may provide affirmation that inflation is moving in the right direction and that the…

Macro Year-over-year (YoY) Consumer Price Index (CPI) has not reached a new low in the past year, bottoming out at 3% a year ago. Persistent inflation results from robust growth and a tightening cycle without even a soft recession. While CPI remains far from the FED’s target, Core Personal Consumption Expenditures (PCE) is more likely to approach 2%, though this might not happen this year. The FED argues that the…

Macro The US economy has demonstrated exceptional resilience in the face of aggressive monetary tightening. This is further underscored by the emergence of increased productivity and the early signs of an economic boost from AI. While the US maintains its supremacy in the long run, driven by innovation, leadership in cutting-edge technologies, control of the world’s reserve currency, energetic independence, private property and the rule of law, and vibrant capital…