Daily Economic Update: April 2, 2024

Yields rose and stocks fell to start the quarter, in a move that likely reflected the fact that Friday was a market close and thus the delayed reaction to PCE and Powell.  The 10Y yield was up double digit basis points to 4.32% and the 2Y yield was up ~8bps to yield to 4.71%

Speaking of the Fed, economist Allison Schrager weighed in on her blog with the following:

"Is it worth damaging an otherwise strong economy to get inflation from 3% to 2%? There is nothing wrong with 3%, other than the fact the Fed’s target is 2%. I know, credibility is important. But let’s be honest, when have they ever hit their target? Their credibility is about faith more than history. They were below target pre-pandemic and now just above. Maybe a wide range is a better idea, or we just admit the Fed does not have precise control over these things. Though I also worry that giving up now could destabilize expectations.

Sometimes we all need to believe something, even if it is not true. It makes for a stable(ish) equilibrium."

In yesterday's data, the ISM Manufacturing index was above estimates with strong internal components including jobs.  Construction spending was below estimates.    The Atlanta Fed GDPNow is up at 2.8% for Q1 while NY Fed's model is ~1.8%.

XTOD: First Case Of Bird-Cow-Human Transmission Of Bird Flu Reported In Texas

XTOD: Can someone explain to me how Trump Media is trading at ~$6B market cap with $4M in revenue and $58M loss?  How is this not in free fall lmao

XTOD: Bitcoin might be off its all time highs, but over the last 3 years it has outperformed the S&P 500 by over 20%.  April Fools! Actually, the S&P 500 has outperformed Bitcoin by over 20% in the last 3 years.  Thanks for playing!

XTOD: McKinsey is now offering staff 9 months severance if they agree to leave the company, in a bid to reduce headcount amid a huge downturn in professional services.

XTOD: People aren’t really looking to be economically stable before they start families; they’re looking to be existentially stable.

They will opt-out of important life decisions altogether because they are waiting for the day when they will feel like more of a confident person with a firmer sense of self before making a commitment—not knowing that it’s those very decisions and commitments which they are opting out of that would allow them to develop into the person they desire to be.

https://x.com/zerohedge/status/1774864836880372107?s=20

https://x.com/litcapital/status/1774863908055941244?s=20

https://x.com/dollarsanddata/status/1774770955748884981?s=20

https://x.com/MacroEdgeRes/status/1774539417467654543?s=20

https://x.com/lukeburgis/status/1774825939744035030?s=20