A focus for market participants is the outlook for short-term interest rates and FOMC guidance into 2023. There are market-based indicators that we monitor that can be helpful in tracking how the market is discounting probable outcomes related to short-term lending rates. Overnight index swaps have increased over the last six months and recently moved...Read More

The Consumer Price Index accelerated 0.39% m/m with Shelter leading the way, contributing 0.24% to the total m/m increase. On a y/y basis, the headline CPI decelerated modestly from last month’s pace to 8.22% from 8.25%. Shelter contributed 2.18% of the total y/y increase, its tenth consecutive month making a new all-time high contribution. Source:...Read More

A core component of economic growth is liquidity, often measured through the cost and availability of credit. The central starting place for liquidity conditions is the short-term collateralized lending market.  This is often viewed as the safest market since it is short duration and has assets posted to offset any losses or delays in payment....Read More

In the month of August, existing home sales decelerated -19.87% y/y, following -20.07 y/y in the prior month. This marks the thirteenth consecutive month of negative y/y growth. On a m/m basis, existing home sales fell -0.41% in August after back-to-back declines of more than 5% in June and July. The median sales price of...Read More

The U.S. Dollar, using the DXY Index, is up 19% on a year-to-date basis and 27% from its cycle low on January 5th, 2021. As of September 26th, the index is at 113.88, its highest level since May 2002. Source: Macrobond. Listed below are a few callouts to provide global context to the current environment....Read More

The headline Consumer Price Index number came in at 8.3% y/y for the month of August. While still at elevated absolute levels, it was a rate of change deceleration from 8.5% in July and 9.0% in June. On a m/m basis, CPI accelerated 0.12%, following -0.02% in July. Food prices accelerated 11.4% y/y, but the...Read More

Most major European economies are facing all-time highs or multi-decade highs in producer and consumer prices. One of the critical developments in recent months is the acceleration of European energy prices. This increase in prices is a double-edged sword. First, higher energy prices increase producer costs, and companies will attempt to pass that cost onto...Read More

The S&P Global Flash U.S. Composite PMI declined further into contractionary territory in August. The index dropped 2.7 points to 45, down for the fifth consecutive month. This also marks two consecutive months in contractionary territory (below 50), providing more evidence of the previously discussed (July 6, 2022; April 6, 2022) slowdown in economic activity....Read More

We have been noting a deceleration in consumer spending (June 15, 2022; May 25, 2022) and the negative impact this has been having on economic activity (Q1 and Q2 GDP decelerated to start 2022).  Other sources have been noting that consumer spending is still positive and that this could be suggesting that the economy is...Read More

Much of the economic and market commentary in the last month has focused on whether the economy is entering a recession. Specifically, how severe or long a possible recession could be and what that may mean for jobs. We cannot say for certain how any future economic slowdown would impact the current labor market, but...Read More