Following up on the PPI release (discussed along with other core measures) discussed here, how have markets responded, in terms of Fed funds futures, the ten year rate?
All Down: Instantaneous Core Inflation Measures for May
Core PPI under consensus (0% vs. +0.3% m/m).
Misery and Modified Misery
Conventional and Instantaneous
Futures vs. SEP on the Fed Funds Rate Trajectory
Here’s a picture of the Fed funds pre- and post-CPI release/FOMC SEP:
FT-Booth School and FOMC GDP Forecasts
The survey indicates 2.0% median growth q4/q4, not far from June SEP at 2.1% (unchanged from March).
Year-on-Year and Instantaneous Inflation in May; Food Prices Declining
Headline and core surprise on the downside: m/m 0.2% vs. 0.3% consensus, and 0.0% vs 0.1% consensus, respectively. More interestingly, Cleveland Fed core CPI nowcast for May m/m was 0.30%, actual was 0.16%.
GDP, GDO, GDP+
All have a positive gradient in Q1.
On the Recession Indicator Watch: Retail Sales
Out of curiosity, I peruse the web to see who is still saying a recession is coming (with an open mind). This tweet suggests retail sales are the indicator de jour:
Donald Trump on Electric Ships/Boats
From a speech at Las Vegas (source: Newsweek):
“Do Foreign Yield Curves Predict U.S. Recessions and GDP Growth?”
Yes! From Rashed Ahmed and Menzie Chinn, just published in the Journal of Money, Credit and Banking.