US Stagflation Fears Return As PPI Overshoot Confirms Rekindled Price Pressures
Anyone looking to the BLS's update on wholesale prices for relief following an uncomfortably warm read on consumer price inflation across the world's largest economy was disappointed Friday. And severely so.
PPI tripled consensus, rising 0.3% in January from December. That matched the highest estimate from more than four-dozen economists who collectively predicted a 0.1% increase.
Market participants spooked by Tuesday's CPI release thus found no respite in a report that could bode ill for PCE
Apparently this time is not different when it comes to QT. It’s just taken a lot longer than anyone imagined.
H-Man, so when does sticky inflation go away?
I’m not H but I don’t see the problem going away this year. Companies are not likely to give back their hard won gains, not unless their competitors take the red(?) pill and all go down the rabbit hole at once. I will not bet that way for now. After all, those dandy profits will raise company fundamentals and add value and extra cash for buybacks.
Equity investors seem, not entirely nonplussed, but only mildlyplussed. Maybe we think January seasonal wackiness in both price and spending.
How long can US GDP continue to outperform when China, Japan and Germany (think EU) continue to go the other way? I thought we were in a increasingly tightly connected global economy since the 90’s. Feels like one tugboat trying to pull a fleet of cargo ships.
US is running a big deficit which is effectively $1TR+ annual fiscal stimulus.
The federal US deficit is projected to be $1.5T in 2024.
https://www.msn.com/en-us/money/markets/us-cbo-forecasts-slightly-smaller-15-trillion-deficit-for-2024/ar-BB1hWt3X
Yeah, we’re deep in the hole. We have a huge shortfall denominated in a unit of account which we can create literally at will.