Monetary Commentary
@monetarycomm
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Monetary scientist writing about all things macroeconomics
Eurodollar System
Joined April 2022
I opt to make “non-seasonably adjusted” data mainstream. Seasonally adjusted data are meant to strip out the predictable ups and downs — like holiday shopping spikes or weather-driven production changes — so you can focus on underlying trends. But in smoothing out these regular fluctuations, the adjustment process can sometimes hide real changes or even introduce its own quirks that make the data a bit less trustworthy for understanding the full economic landscape.
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#Fed rate hikes in 2022 and 2023 boosted mortgage rates, slowing home buying and boosting rental demand. This rental surge led landlords to hike rents, which inflated shelter costs, a major component of #CPI, thus significantly contributing to #inflation.
Core #CPI’s 0.4% monthly gain in January — its strongest M/M ascent since April 2023 — underscores that underlying #inflation is becoming entrenched rather than merely reflecting seasonal adjustments. Shelter costs, which account for roughly one-third of the overall index, continue to push upward, while sharp increases in motor vehicle insurance and used vehicles signal persistent supply and cost pressures in key service sectors. As such, the adjustments traditionally seen at the turn of the year may mask more structural inflation risks. With core inflation stubbornly high, the #Fed faces a tougher task in achieving price stability, likely delaying any monetary easing in the near term, or at least until incoming data say otherwise.
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@biancoresearch Another POV👇
Core #CPI’s 0.4% monthly gain in January — its strongest M/M ascent since April 2023 — underscores that underlying #inflation is becoming entrenched rather than merely reflecting seasonal adjustments. Shelter costs, which account for roughly one-third of the overall index, continue to push upward, while sharp increases in motor vehicle insurance and used vehicles signal persistent supply and cost pressures in key service sectors. As such, the adjustments traditionally seen at the turn of the year may mask more structural inflation risks. With core inflation stubbornly high, the #Fed faces a tougher task in achieving price stability, likely delaying any monetary easing in the near term, or at least until incoming data say otherwise.
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Core #CPI’s 0.4% monthly gain in January — its strongest M/M ascent since April 2023 — underscores that underlying #inflation is becoming entrenched rather than merely reflecting seasonal adjustments. Shelter costs, which account for roughly one-third of the overall index, continue to push upward, while sharp increases in motor vehicle insurance and used vehicles signal persistent supply and cost pressures in key service sectors. As such, the adjustments traditionally seen at the turn of the year may mask more structural inflation risks. With core inflation stubbornly high, the #Fed faces a tougher task in achieving price stability, likely delaying any monetary easing in the near term, or at least until incoming data say otherwise.
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Definitely not bills🤦♂️
As it becomes clear that @DOGE is working, you will see the long-term Treasury bill yields fall. And all Americans will benefit from lower interest payments on mortgages, small business debt, credit card and other loans.
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@dampedspring I don’t see how that would address the core issue of demand-pull inflation, which rate hikes directly target (unless we’re talking supply, of course). Combining your proposed balance sheet strategy with “restrictive” rates would be ideal, not just one or the other.
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The January effect with #CPI refers to a seasonal bump in inflation numbers seen at the start of the year. It’s largely driven by businesses adjusting or “resetting” prices after the holiday season and recalibrating seasonal factors, which can temporarily push the CPI higher — even if underlying #inflation trends remain more stable.
HOT CPI PRINT. January comes back to bite!
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The January #jobs report showed the gap between the establishment and household employment surveys has narrowed. The CES continued to show solid, albeit moderating, job growth — with 143,000 new positions added in January — while the CPS data was revised upward due to updated #population controls. These revisions recalibrated past understatements in household #employment, aligning it more closely with the payroll data. The divergence in the two surveys stems from their different methodologies — CES counts jobs (which can include multiple jobs per person), whereas CPS counts individuals — but this time, improved demographic adjustments in the CPS helped reduce that natural discrepancy.
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Inflation's still a big deal, so you can't just count on lower rates or a weaker dollar to boost things. They might just make everything more expensive, and if people think it's because the economy's shaky, they might start pulling their money out, which could make things worse, not better.
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This volume compression is usually indicative of a market top forming, as further evidenced by a multi-week consolidation period and persistently bad breadth. $SPY $SPX
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The NFIB Small Business Uncertainty Index surged by 14 points in January to 100 — the largest increase on record — after two months of declines. This sharp increase reflects heightened concerns among small business owners about future economic conditions, including hiring challenges and uncertainties surrounding fiscal and trade policies. Amid #Trump 2.0, a barrage of fresh reads across various soft data, namely UMich, has been reflecting the same level of heightened uncertainty. Why do you think the price of #gold is surging?
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