This is a reprint of a post from 2020.
(And I have seen a lot of terrible analysis) [Update 8/14/2020: the author has taken down the post, but here is an archived 8/13/2020 version of the webpage]
Reader Bruce Hall recommends links to this article which asserts that 2020 is not anomalous in terms of deaths. In fact, it’s 20th out the last 21 years!
Industrial output, manufacturing down. Retail sales down.
Up, up and away. But that’s been true in the past too.
Drop in GDP trajectory, rise in inflation expectations, and expected long rates up.
Back in the more innocent days of 2010, we had Sarah Palin – “Drill, baby, drill” (more innocent because folk were just circulating doctored photos of President Obama, instead of threatening to kill elected officials). Now, we have a new chorus of people asserting that allowing more permitting would relieve gasoline price pressures. Well, from the Dallas Fed (courtesy of Bruce Hall), some text in plain English.
Five year inflation breakeven shrinks, ten year – three month spread dives, TIPS and expected real rates rise above zero. The S&P500 and Bitcoin falls even as VIX remains at sub-Trump levels.
Some key interest differentials, through March:
Official, chained, sticky price, 16% trimmed, and (for March) PCE deflator.
Yesterday, a discussion on Marketplace (w/Justin Ho) about how these terms fit together. In order to explain, consider a broad price index (e.g., CPI). Then one can illustrate these concepts graphically:
Dramatic plunge in headline CPI m/m inflation, but both headline and core surprise on upside.