The Consumer Price Index (CPI) for February rose in-line with expectations, but the headline number remains higher than the Federal Reserve’s target and there were some concerning readings under the surface. Consumers are spending less than expected, as pockets of weakness appear in the labor market. Corporations are doing more with fewer employees. Oil prices are slowly rising. Yield curve inversion. Who wins when the Federal Reserve cuts?
1. We expect bumps on the road to 2% inflation but hopefully we’re still on the right road:
Source: The Daily Shot 3/13/2024
2. The divergence between CPI rent indices and observed rents remained in February:
3. Retail sales did grow in February, but they have been weaker than forecast year-to-date:
Source: The Daily Shot 3/15/2024
4. Small business hiring plans have clearly weakened:
Source: The Daily Shot 3/11/2024
5. Along with plans to increase compensation:
Source: The Daily Shot 3/11/2024
6. Capitalism is working when we are able to produce more output with fewer inputs, labor being among the most important:
7. OPEC has committed to extending their current production cuts to boost oil prices:
Source: The Daily Shot 3/13/2024
8. Less volatility in prices is a positive for oil producers:
Source: The Daily Shot 3/13/2024
9. A recession will come at some point but in this cycle the inverted yield curve has not been a useful indicator:
10. Notably, bonds have historically led stocks both before and after rate cuts: