Access to high-quality liquid assets (HQLAs), such as short-term government securities like U.S. Treasury Bills, is a critical component to bank lending activity. Banks need collateral for several reasons, but we tend to track demand for collateral because of its importance to banks when it comes to credit formation. Banks’ ability and willingness to lend...Read More

Throughout 2022, there was much debate on whether inflation measures would continue to accelerate toward record growth rates. Since the middle of last year, we have been discussing our view that inflation would likely slow on a rate of change basis as the comparison set got tougher and consumer demand decelerated. Last week we received...Read More

Over the last few months, we have been noting the shape of the U.S. Treasury yield curve. Expectations for more rate hikes increased as the Fed continued to be hawkish, and the curve inversion worsened. The long end is being driven by a decelerating economic outlook while the front end is more responsive to Fed...Read More

A slowdown in consumer demand will likely have negative implications for the economy. Outside of retail sales or personal consumption expenditures, there are other measures we can look to for insight on expectations for consumer demand. Tracking new order growth provides a view into how much product businesses are putting on-line given their expectations for...Read More

Existing single-family home sales decelerated -0.83% m/m, its twelfth consecutive month in negative territory. On a y/y basis, existing single-family home sales decelerated -36.12%, which is the fastest deceleration on record. The median sales price for all existing homes price decelerated to 1.33% y/y, its ninth consecutive deceleration, and the comparison set gets tougher through...Read More

Retail and food services sales for the month of January accelerated 2.96% m/m, following -1.09% in December and -1.07% in November. The largest acceleration came from department stores (+17.52% m/m), followed by food services and drinking places (+7.19% m/m), and automobiles (+6.45% m/m). Source: Macrobond. Since the pandemic started, we have seen similar accelerations in...Read More

The net one-month change in nonfarm payrolls, as reported by the Establishment Survey, was 517,000. The Household Survey reported an additional 894,000 jobs. Both releases featured their own set of statistical assumptions that should be considered when reviewing the data. Source: Bureau of Labor Statistics.  When it comes to payroll updates, there are three data...Read More

Retail sales declined 1.1% m/m in December, following a downwardly revised -1% in the prior month. This pushed the value of nominal sales back to where it was in May 2022 and down 2.1% from its recent high in October. Real retail sales fell 1.1% m/m, bringing the value down 3.8% from its March 2021...Read More

Headline CPI slowed to 6.42% y/y, its sixth consecutive month of decelerations. The rate of change accelerated to the downside over the last three months. The month-to-month delta in the year-over-year percent change moved from a -46-basis point deceleration in October versus September to -65 basis points in November versus October and -70 basis points...Read More

Purchasing Managers’ Index (PMI) data can be used as a gauge for economy activity within manufacturing and services. The survey seeks to capture whether activity has improved or worsened versus the prior month. A print below 50 is an indication of contraction versus the prior month. S&P Global U.S. Composite PMI fell 1.4 points to...Read More