Hedge Eye has an interesting take on US CPI. They forecast the next four quarters to be 3.65%, 3.78%, 4.07% and 4.32%. The Bloomberg Consensus is for 3.3%, 3.0%, 2.9% and 2.6%. Someone's going to be right and someone wrong. Given a slowing economy, stagflation hangs in the balance. Hedge Eye also referenced their survey that showed half of all Americans have nothing left from their paycheque at the end of the pay period. It's just unlikely that retail sales are going to fuel a blaze of Inflation with little or no growth. Q1 Employment costs are coming in hot at 1.2% versus the expected 1.0%.
The 2-year is up at 5.02% and across the board, the yields rise, markets nosedive. The culprit is not actually the wage portion. It's the benefits that for employees. One and done? Today, only half the respondents say the FED will cut in September. Grant says we might have to hike. There seems to be no talk of a soft landing anymore.
Inflation heating up - Economy slowing down - Stagflation anyone?
Praveen Chawla
Apr 30, 2024
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