The Biggest Pusher of Easy Money, Former Federal Reserve Chairman Bernanke Warns on Stagflation in New Book

What do you do you do when you are the man that espoused easy money through Quantitative Easing, took it to new levels and the bloated world you created implodes? You write a book about it of course. That’s exactly what former Federal Reserve Chairman Ben Bernanke has done and of course he warns in his new book that the United States could face simultaneous sky-high unemployment and inflation on levels not seen since the 1970s. Any mention of his … Continue reading “The Biggest Pusher of Easy Money, Former Federal Reserve Chairman Bernanke Warns on Stagflation in New Book”

US Mortgage Applications Slide 11% After Federal Reserve Raised Rates 50bps

The Mortgage Bankers Association showed mortgage applications in the US fell -11.0% after rising +2.0% last week. The Federal Reserve raised rates 50bps that week. The 30-year mortgage rate has been rising with yields with higher house prices in general. The purchase index slumped to its weakest level since May 2020 and the refinancing index to its lowest since January 2019.  Mortgage Bankers Association for the week ending 13 May 2022 US MBA mortgage applications w.e. 13 May -11.0% vs … Continue reading “US Mortgage Applications Slide 11% After Federal Reserve Raised Rates 50bps”

Dutch Central Bank Chief First ECB Governor To Raise Prospect of 50Bps Rate Rise

A top European Central Bank official has raised the prospect of a half percentage point rate increase in July. Dutch central bank chief Klaas Knot said if inflation continues to climb then rates may need to be raised. This was the first time such an aggressive shift has been suggested. The ECB left rates unchanged as expected in April. The bank left deposit facility interest rates at -.50%. Highlights Dutch central bank chief Klaas Knot is one of the more … Continue reading “Dutch Central Bank Chief First ECB Governor To Raise Prospect of 50Bps Rate Rise”

Baltic Sea Freight Index Higher for Fifth Straight Week Led By capesize index up 36.4%

The Baltic Exchange’s dry bulk sea freight index rose14.2% for the week. The BDI rose the fifth consecutive weekly gain and to a seven-week high. Pressure came again from rising rates for capesize and supramax vessels. The capesize index rose 36.4%, also its fifth consecutive weekly gain. The panamax index also rose, for the second week in a row. There was fresh activity in the grain market, Algeria’s state grains agency OAIC is believed to have purchased a total of … Continue reading “Baltic Sea Freight Index Higher for Fifth Straight Week Led By capesize index up 36.4%”

Banco de México Raises Rates Again with Inflation Risk to Mexican Economy

The Mexican Central Bank, Banco de México raised interest rates by 50 basis points to 7.00% with the bank saying headline and core inflation forecasts were revised upwards. One dissenter voted to hike by 75 bps. The Mexico central bank Governing Board increased the target for the overnight interbank interest rate by 50 basis points to 7.00%. The vote was not unanimous. Voting in favor of the decision were Victoria Rodríguez, Galia Borja, Gerardo Esquivel, and Jonathan Heath. Voting in … Continue reading “Banco de México Raises Rates Again with Inflation Risk to Mexican Economy”

US Producer Price Inflation Rose 0.5% m/m and 11.0% y/y in April

US Producer price inflation continues elevated at a rapid pace, a long way from the Central Bank transitory mantra. Annual PPI came in at 11.0% (vs. 11.5% in March) core producer prices were up 8.8% (vs. +9.2% in March). March was the largest increase since data were first calculated in December 2009. Month-over-month the rise was 0.5% in April (consensus +0.5%), and core producer prices rose 0.4% m/m (consensus +0.6%).  April 2022 PPI The Producer Price Index for final demand … Continue reading “US Producer Price Inflation Rose 0.5% m/m and 11.0% y/y in April”

U.S. Inflation Higher Than Expected in April CPI +8.3% y/y vs 8.1% y/y

US CPI in April rose +0.3% m/m (consensus 0.2%). Core CPI rose 0.6% (consensus +0.4%). The bond and stock markets have been selling off on inflation fears. 10-year yields rising over 3%. On a year-over-year basis, total CPI is up 8.3% (versus 8.1% expected) and core CPI is up 6.2% (versus 6.0% Expected). The surge in energy and grains costs due to war in Ukraine has inflamed price pressures. The Fed began moving aggressively last month. April marked the eighth time … Continue reading “U.S. Inflation Higher Than Expected in April CPI +8.3% y/y vs 8.1% y/y”

American Household Financial Stress Highest Level Since Outset of the Pandemic in April 2020

The IBD/TIPP Economic Optimism Index fell to 41.2 in May of 2022 from 45.5 in April only barely above March’s eight-year low of 41. Rising interest rates, Russia’s war in Ukraine, and China’s COVID-related lockdowns all impacted the mood.  The six-month outlook for the US economy tumbled 6.5 points to 33.2, the lowest level since August 2011. IBD/TIPP Economic Optimism Index May of 2022 IBD/TIPP Economic Optimism Index in the US fell to 41.2 in May of 2022 from 45.5 … Continue reading “American Household Financial Stress Highest Level Since Outset of the Pandemic in April 2020”

Federal Reserve Financial Stability Report Warns on Worsening Liquidity Risks

The Federal Reserve released its twice–yearly report on financial hazards in its 2022 financial stability report warning the recent deterioration in liquidity has not been as extreme as in some past episodes but the risk of a sudden significant deterioration appears higher than normal. They also noted commodities have been subject to notable dysfunction. Federal Reserve 2022 financial stability report Highlights‘ “According to some measures, market liquidity has declined since late 2021 in the markets for recently-issued U.S. cash Treasury … Continue reading “Federal Reserve Financial Stability Report Warns on Worsening Liquidity Risks”

Demand For Larger Ships Pushes Baltic Sea Freight Index Higher for Fourth Straight Week

The Baltic Exchange’s dry bulk sea freight index rose 2.8% to 2,718 points on Friday. The BDI rose 13.1%, on the week, the fourth consecutive weekly gain and to a seven-week high. Pressure came again from rising rates for capesize and supramax vessels. The panamax index also rose, for the first time in three weeks, gaining 8.1% on the week. There was fresh activity in the grain market. Baltic Exchange Dry Index (BDI) Segments (May 8, 2022) The Baltic Exchange’s … Continue reading “Demand For Larger Ships Pushes Baltic Sea Freight Index Higher for Fourth Straight Week”