How soon will the Fed green-light the markets?
These 7 charts can help us figure it out 🧵
These 7 charts can help us figure it out 🧵
1/
Friday's survey data showed the first contraction in business activity since the pandemic.
Respondents asserted that disinflation is already here.
Friday's survey data showed the first contraction in business activity since the pandemic.
Respondents asserted that disinflation is already here.
2/
The Fed’s Prices Paid index for the Philadelphia region (the most recent data), suggests prices are already falling (from admittedly high levels).
The Fed’s Prices Paid index for the Philadelphia region (the most recent data), suggests prices are already falling (from admittedly high levels).
3/
The Fed’s Future Prices Received index shows businesses expect prices to fall further.
Prices received falling faster than prices paid does not bode well for corporate profitability.
The Fed’s Future Prices Received index shows businesses expect prices to fall further.
Prices received falling faster than prices paid does not bode well for corporate profitability.
4/
Business inventories rose 17.7% in May (and presumably more in June and July).
Retailers won’t worry much about 9% CPI when they are having to cut prices to get you to buy anything.
Business inventories rose 17.7% in May (and presumably more in June and July).
Retailers won’t worry much about 9% CPI when they are having to cut prices to get you to buy anything.
5/
If you do buy their inventory, they won’t have trouble getting more.
The cost of shipping freight from China to the US (blue line) has fallen 65% from September highs.
If you do buy their inventory, they won’t have trouble getting more.
The cost of shipping freight from China to the US (blue line) has fallen 65% from September highs.
6/
US gasoline prices have fallen for 39 straight days (39!) — from $5.10 on June 13 to $4.60 last Friday.
US gasoline prices have fallen for 39 straight days (39!) — from $5.10 on June 13 to $4.60 last Friday.
7/
Our housing expectations have already followed.
The housing bubble is bursting, just like the Fed asked it to.
Our housing expectations have already followed.
The housing bubble is bursting, just like the Fed asked it to.
8/
The Cleveland Fed’s Inflation Now model sees the upcoming CPI print at just 0.33% month-on-month, down nearly a full point from June's 1.3%.
@bgilliam1982 doesn't expect to see Powell don the flight suit on August 11, but he might at least start checking his closet for it.
The Cleveland Fed’s Inflation Now model sees the upcoming CPI print at just 0.33% month-on-month, down nearly a full point from June's 1.3%.
@bgilliam1982 doesn't expect to see Powell don the flight suit on August 11, but he might at least start checking his closet for it.
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