Record Manufacturing Activity, Financial Crisis Echoes, and the Bank of Canada Signals Stimulus Scale Back
April 23, 2021 | FIRESIDE CHARTS
Manufacturing activity has soared to new heights per the Kansas City Fed, though material prices are also climbing. Will these climbing costs eventually materialize in CPI, even as record home prices continue to fly under the index’s radar? Equity withdrawals meanwhile are inching back toward Financial Crisis territory after a year marked by record-low interest rates and a surge in refinancing. Could it spell trouble ahead? Over on the international stage, the Bank of Canada took a hawkish turn—hinting they will start easing off the stimulus gas pedal—and the ECB may not be too far behind.
1. The Fed’s U.S. regional manufacturing reports are not only strong, they are shattering records:
Source: The Daily Shot, from 4/23/21
2. This extraordinary activity is coming with higher prices. Will these higher costs get passed through to the consumer?”
Source: The Daily Shot, from 4/23/21
3. Huge demand and lack of supply are driving home prices to new highs. None of these increases show up in the CPI as CPI uses equivalent rent, which has declined…
Source: The Daily Shot, from 4/23/21
4. “Those who do not learn from history are doomed to repeat it”:
Source: The Daily Shot, from 4/23/21
5. Good news for farmers, bad news at the supermarket.
Source: Bloomberg, from 4/22/21
6. As the pandemic’s fog around earnings lifts, it is great to see the results!
Source: The Daily Shot, from 4/23/21
7. The Bank of Canada became the first “major” central bank to signal the end of QE by paring bond purchases and moving up the timeline for rate hikes. Their currency and yields responded accordingly:
Source: The Daily Shot, from 4/22/21
8. Pundits immediately questioned the rationale as CPI is still modest, especially with the base effects of the pandemic factored in:
Source: The Daily Shot, from 4/21/21
9. Perhaps the Bank of Canada was not first. The European Central Bank has increased bond purchases, but not enough to counter what is maturing
Source: The Daily Shot, from 4/22/21
10. The manufacturing recovery and boom is truly a global phenomenon:
Source: The Daily Shot, from 4/23/21
11. There is a vital humanitarian race going on that has largely left the news. Vaccinations are rising, but a fourth Covid wave, greater than any other, is enveloping the world:
Source: Statista, from 4/22/21
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