Hi Mark, I've been mentioning the base effect in your comments for about 18 months now. The number going out (13th month) is equally as important as the number coming in, and it is known. I can't believe more attention is not paid to it. It is the best estimator of the inflation path there is as it is known. Headline CPI @ 3.3% - July, August, September '23 are 0.2%, 0.4% and 0.5% MOM respectively. Total of 1.1% potentially gets removed in the next Qtr. An Avg of less than 0.25% prints for next 3 months, which feels quite high considering we just hit a 0% and all the points in your discussion, headline CPI will go below 3% in September print. If we got 3 months Averaging at 0% it would be 2.3%. Headline PCE @ 2.7% - 0.1%, 0.4% and 0.4% for July/August/September '23. 0.9% in Qtr. Will at least be close to 2% in September. If the economy can hold for 3 more months, I see rate cuts coming faster than the Fed knows.
14:22 I don't know, these m/m from 2nd half od 2023 are not that high (0.2%-0.5%). Even assuming no inflation m/m for next 3 months, y/y will not fall below 4%. We need 7 months with no inflation to fall below 2.5%
Thanks Prof. Any particular reason you are shorting momentum at this point? I still feel there’s run up potential with earnings around the corner and PCE later this month.
If the Core PCE is at 2% or less than 2% at September, and they start cutting, Do you think it makes sense for them to cut by 25 BPs every meeting from then on throughout 2025 as well to bring back nominal neutral rate to 2% or lesser?
Thanks Dr Mark as always your guidance is priceless...Could you possibly touch on how you determined that the so called inflation was a supply issue as opposed to actual year on year price appreciation....I know you covered this in a previous Mkt Outlook but I find it hard to differentiate between a fiscally expansive government not having an effect on prices as opposed to the data coming down whereby it is becoming clear it was always a supply issue...is it you just take the data as it is when released, I just remember you stating way back thet this is a supply issue....how did you know at the time?
yay Mark Meldrum dropped!
Really appreciate the mid-week video.
Hi Mark, I've been mentioning the base effect in your comments for about 18 months now. The number going out (13th month) is equally as important as the number coming in, and it is known. I can't believe more attention is not paid to it. It is the best estimator of the inflation path there is as it is known.
Headline CPI @ 3.3% - July, August, September '23 are 0.2%, 0.4% and 0.5% MOM respectively. Total of 1.1% potentially gets removed in the next Qtr. An Avg of less than 0.25% prints for next 3 months, which feels quite high considering we just hit a 0% and all the points in your discussion, headline CPI will go below 3% in September print. If we got 3 months Averaging at 0% it would be 2.3%.
Headline PCE @ 2.7% - 0.1%, 0.4% and 0.4% for July/August/September '23. 0.9% in Qtr. Will at least be close to 2% in September.
If the economy can hold for 3 more months, I see rate cuts coming faster than the Fed knows.
Superb Sir
Banger after banger
14:22
I don't know, these m/m from 2nd half od 2023 are not that high (0.2%-0.5%). Even assuming no inflation m/m for next 3 months, y/y will not fall below 4%. We need 7 months with no inflation to fall below 2.5%
awesome commentary. Thanks Mark
Thanks, Mark!
Would be cool if you covered the different/common routes for shippers and the geopolitical sensitive routes
Thanks Prof. Any particular reason you are shorting momentum at this point? I still feel there’s run up potential with earnings around the corner and PCE later this month.
If the Core PCE is at 2% or less than 2% at September, and they start cutting, Do you think it makes sense for them to cut by 25 BPs every meeting from then on throughout 2025 as well to bring back nominal neutral rate to 2% or lesser?
Thanks Dr Mark as always your guidance is priceless...Could you possibly touch on how you determined that the so called inflation was a supply issue as opposed to actual year on year price appreciation....I know you covered this in a previous Mkt Outlook but I find it hard to differentiate between a fiscally expansive government not having an effect on prices as opposed to the data coming down whereby it is becoming clear it was always a supply issue...is it you just take the data as it is when released, I just remember you stating way back thet this is a supply issue....how did you know at the time?
Yeah even I thought it was due to the multi trillion dollar stimulus during the pandemic
Hello Mark - was trying to upload the CFA result file but the upload feature won't work
It seems like there is too much focus on the SPX 500 as the ‘stock market’. The broader market is not up as much.
ZIRP Forever and cheques to all.
Is that your campaign slogan! 😂
quick question, why did you say that technology is deflationary?
Bcuz it makes producers more productive, they can produce at lower cost
Do you think this downward trajectory of inflation will last despite trump pushing for lower rates and taxes? (If he’s elected that is)
They're not going to let him win haha.
Why cant the fed be wrong in the other direction?
If you believe that inflation is coming down faster than predicted and that rates will come down, why did you decide to increase your beta position?