Tag: price inflation

Prices Up, Personal Consumption Down

Prices Up, Personal Consumption Down

The Federal Reserve Bank of Atlanta estimates Real GDP for Q3 at 1.4%. That is likely an optimistic outlook and 1% growth is certainly nothing to write home about. Get used to it however as Real GDP in the -1% to 1% range is likely our future for the next decade or two given elevated … Continue reading Prices Up, Personal Consumption Down

Fix The Problem Rather Than Dance At The Edges

Fix The Problem Rather Than Dance At The Edges

What Fed Chair Powell spouts Friday in Jackson Hole WY will be meaningless in the long-term. The longer the Fed allows price inflation to persist, the longer the economy will remain in this stagflationary environment of high prices and low economic growth (if any real growth at all). It's simple math. For every incremental dollar … Continue reading Fix The Problem Rather Than Dance At The Edges

CPI Release On Wednesday: Our Thoughts

CPI Release On Wednesday: Our Thoughts

We expect the June CPI figure to come in around 9% when CPI data is released Wednesday at 8:30am ET. What do we expect for a Fed Funds Rate increase?If the CPI comes in at 8.0-8.5%, we expect that the Fed will increase the Fed Funds Rate by 75 basis points at its FOMC meeting … Continue reading CPI Release On Wednesday: Our Thoughts

Will Powell Surprise To The Upside?

Will Powell Surprise To The Upside?

The Fed's FOMC meeting will take place this week on June 14th and 15th. Fed Chair Powell has lost control of the inflation narrative. The Fed needs to act boldly to capture control of the inflation narrative. Price inflation was obviously never going to be transitory given the Fed grew the money supply as measured … Continue reading Will Powell Surprise To The Upside?

CPI Will Persist Above The Fed’s Target

CPI Will Persist Above The Fed’s Target

Inflation as measured by the CPI will persist above the Fed's target rate of 2% over the long-term. Why? Because as Milton Friedman said: "Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in … Continue reading CPI Will Persist Above The Fed’s Target

Tomorrow’s Fed Decision

Tomorrow’s Fed Decision

We expect a 50 basis point increase in the Fed Funds rate tomorrow. More importantly over the next number of months will be the Fed's actions with respect to its balance sheet. Our focus will be on the Fed's balance sheet over the next number of months (see chart below), which has ticked down recently … Continue reading Tomorrow’s Fed Decision

Fed Spin and U.S. Jobs

Fed Spin and U.S. Jobs

Federal Reserve officials tout the U.S. economy's strength as the reason why Fed tightening will not tip the economy into recession. The unemployment rate is the preferred metric of Fed officials who are spinning the tale of a strong economy. We provide an alternative. The Fed is expert at one thing - pulling the wool … Continue reading Fed Spin and U.S. Jobs

Get Ready for EPS Misses

Get Ready for EPS Misses

One thing that's for sure is that many companies are hesitant to get in front of bad news. Given that inflation in all forms is not going anywhere, we expect many companies to report Revenue and Earnings shortfalls in April as March quarter results and 2022 full year outlooks are communicated to investors. Inflation has … Continue reading Get Ready for EPS Misses

Tech Earnings Season Is Here

Tech Earnings Season Is Here

Technology company earnings season is in high gear. It is a heck of a time to be a Technology fund PM or Analyst. Despite the NASDAQ Composite being down 13% YTD, the group has another 40% downside or more in our view. Many of the high-multiple of revenue (no earnings) stocks have 80-90% downside as … Continue reading Tech Earnings Season Is Here