ICYMI Japan’s stock market he regained all its losses since last week’s epic route. I'm happy that it didn't take 34 years to recover this time.
UK inflation was below estimates, New Zealand cut rates, Middle East tensions haven't boiled over (yet) and you aren't really talking about MonkeyPox yet, right? So all was good. And then CPI was benign: US CPI came in largely in line with estimates, with headline and core both roundng up to 0.2% MoM, which matched estimates. The YoY headline number was 2.9% which was below the estimate of 3.0%
Of course everyone focuses on the internal components of the CPI report. Shelter and rent not declining, insurance cost, etc. But isn’t it funny how inflation is an increase in the overall price level, thus why we create indexes to measure inflation, but then we spend a bunch of time discussing individual components? At some level discussing the individual components of the index is ultimately a discussion of relative prices and changes in relative prices isn't inflation. It feels like this insistence to discuss relative prices via the components of CPI reports losses the whole narrative on discussing inflation. Perhaps this is why so much of the plot is lost when discussing what caused or is causing inflation and whether certain policies are working to lower inflation. (see Twitter/X Thoughts below - for someone thinking the same thing).
Stocks were up, yields were mixed to down. The 2Y remains around 3.95% and the 10Y is at 3.83% and you're not talking about MonkeyPox.
Retail sales on the day ahead.
XTOD: The problem with this decomposition is that relative prices change all the time. Inflation measures the change in the overall price-level. Seems unlikely that any given component of the consumption basket is "driving" inflation at any given point in time.
XTOD: Here is my earlier thread. Conclusion unchanged: "This gives [the Fed] permission to do whatever they need to for the employment side of the mandate. IF the next jobs report is weak... expect 50bp. Otherwise probably will go with 25bp..."
XTOD: How does the FTPL make sense of this low inflation? CBO is estimating another $20+ trillion of debt (i.e. sustained primary deficits) will be added over the next decade. @JohnHCochrane
@Francesco_Bia @dandolfa
@HannoLustig
XTOD: With some parents using tablets as digital pacifiers to soothe their children, a new study finds preschoolers who spend 75 minutes or more in front of a screen showed increased anger and frustration as they got older, along with difficulties in regulating their emotions.
XTOD: Essentialism would be easy, if it weren't for the people.
To bring essentialism alive, upgrade your communication and negotiation skills.
Priority conversations vs. Reactive emails
Talk about underlying vs. Ignoring stuff
Culture of listening vs. Loudest voices
Essentialism is done together or not at all.
https://x.com/dandolfa/status/1823749810241069365
https://x.com/jasonfurman/status/1823796933380727072
https://x.com/DavidBeckworth/status/1823722614919192856
https://x.com/CBSEveningNews/status/1823497830721348013
https://x.com/GregoryMcKeown/status/1823405827178565880
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