Disinflation

April’s Personal Consumption Expenditures data presented a complex picture for Jerome Powell, with economists suggesting the persistent cloud of tariff uncertainty compels the central bank to “wait and see” policy stance even as “disinflation” has set in. What Happened...

Another indicator of slowing inflation came in on Friday morning with a cooler-than-expected Producer Price Index that fell 0.4% month-over-month in March. On an annual basis, producer inflation slowed to 2.7%, well below economists’ estimates of 3.3% and down from 3.2% in February....

The Disinflation Issue The big news this week was the lower-than-expected CPI and PPI figures for July. While expectations for a September 50bp (0.5%) rate cut by the Fed changes on a daily basis, DKI agrees with current consensus that we’ll see a 25bp cut next month. We believe that’s...

Following the latest weaker-than-expected inflation reports, investors are eagerly awaiting June Consumer Price Index (CPI) report this Thursday to strengthen their expectations of interest rate cuts. While Federal Reserve Chair Jerome Powell reiterated Tuesday it won’t be appropriate to cut...

U.S. equities were little moved on Tuesday as investors continued to assess the potential for interest rate cuts following the latest economic data and comments from Fed Chair Jerome Powell. Speaking at the European Central Bank (ECB) forum in Portugal, Powell welcomed recent progress on...

The International Monetary Fund (IMF) has recently raised alarms over the fiscal health of the United States, with potential repercussions for the global economy. What Happened: The IMF has voiced serious concerns about the sustainability of U.S. fiscal policies and their implications for both...

Fears of a severe economic downturn are fading as economic growth continued to outpace expectations, and on Tuesday, the International Monetary Fund (IMF) backed up hopes of a soft landing in its quarterly report. The Washington, D.C.-based IMF said economic resilience seen in the second half of...

As the U.S. continues to struggle with higher-than-ideal levels of inflation, China is facing the opposite problem. Wednesday's CPI report showed an yearly rise of 4.9% in American consumer prices — a positive step in a disinflationary trend, but still far from the Fed's ideal place of 2% annual...

Former Pimco chief economist Paul McCulley believes the Federal Reserve is likely to hold its rate hike cycle during its upcoming policy meet in May and said he disagrees with where the Fed funds futures are priced. What Happened: "I don’t think that the street at large, my old economic...

According to Bank of America Securities, the U.S. economy will enter a phase of sustained disinflation, which will intensify over the remainder of 2023. BofA affirms inflation is following a mean reversion trend, which is consistent with the fall in inflationary surprises since May 2022. The view...

Consumer expectations for short-term inflation are improving, according to a new Fed survey conducted in February. Median inflation expectations for the one-year-ahead horizon dropped to an average of 4.2% in February, from 5% in the previous month. The 0.8% drop marks a quick improvement in...

The U.S. index futures point to a mixed start on Monday, reflecting cautious sentiment ahead of the January consumer price inflation report due to be released on Tuesday. The S&P 500 and Nasdaq Composite futures gained ground, while the Dow futures were slightly lower. Cues From Last Week...

The financial markets have put to rest all skepticism and launched into a strong rally this year, and assets that were beaten down in 2022 have led the resurgence. Market On Risk-On Mode: The gains have come despite the Fed signaling more rate hikes for the year. Ironically, market...

Tesla Inc. (NASDAQ:TSLA) shares closed 1.05% higher on Tuesday and has gained over 13% in last five days. What Happened: The stock, like major Wall Street indices, witnessed a see-saw movement on Tuesday as investors and traders held on to every word spoken by Federal Reserve Chairman Jerome Powell...

The International Monetary Fund has said in a blog that central banks must be resolute in their fight against inflation and ensure policy remains appropriately tight long enough to durably bring inflation back to target. What Happened: Authors Tobias Adrian, Christopher Erceg and Fabio Natalucci...