US Economic News

[weijian]

These are really anecdotal evidence that inflation will persist in time to come.

Amazon to cover 100% of college tuition for U.S. hourly employees

Amazon is offering to pay the full cost of college tuition, including books and fees, for its 750,000 hourly U.S. employees.

Amazon is the latest large U.S. company to dangle perks such as education benefits or more pay in light of the competitive job market.

https://www.cnbc.com/2021/09/09/amazon-t...oyees.html

[BigFatWhale]

Looking at 6 Indicators to Gauge if S&P500 is Peaking?

The market has been on a tear ever since its huge 35% correction in March 2020- S&P index drop from 3400 to 2200- due to the Covid 19 pandemic. It has more than doubled from the bottom to its current level at 4650.

So what’s the outlook ahead?

Is it on a never-ending trajectory to the moon?

We will be looking at 6 indicators and the chart of S&P to give us some indication if things are getting way too hot that will lead to the imminent meltdown.

Click Here to Read More:

https://thebigfatwhale.com/a-look-into-6...s-peaking/

[BigFatWhale]

There is already a decline in GDP in the latest quarterly figure. So a recession is looming as the definition is 2 quarters of declining GDP for a recession to happen technically.

What we should worry about would be how it would affect the equity markets?

The result is usually a market decline that could last for a year or so.

In this article, we look at the historical implication of an inverted yield curve that has strong prowess in predicting recessions. The yield curve has inverted on 1/4/2022.

Here is the link for the article:


https://thebigfatwhale.com/recession-onc...eld-curve/

[weijian]

Wage inflation has to be going out of control pretty soon. Will Labor soon have the upper hand over capital again?

15 of the Craziest Charts Right Now

Markets are doing what they do. Here are 15 of the craziest charts I’m looking at these days:

12. This is a bizarre economy. The gap between job openings and the number of people who are unemployed is wild:

https://awealthofcommonsense.com/2022/05...right-now/

[specuvestor]

US inflation is likely to peak YoY in 2Q22 because of the higher base in 2021 with Powell's famous Transient comment... Market is already looking to Fed hiking 50bp in June and July so recession coming in 2Q23. That's probably baked in by the markets. That's like 200bp hike within 6 months plus QT. Compare that with BoE 4 hikes that started in Dec21 with the FTSE relatively flat (excluding GBP depreciation) and we can see how Powell lost the script AGAIN

The concern is whether they will hike 50bp again in Sept or 75bp prior as Fed might be concerned of CPI sticky at 2-5% even as CPI likely to trend towards 5% by Dec 2022. If Fed hikes 25bp or stay in Sept and decided to wait and see I think markets will be relieved. But I'm concern about how clueless Powell can be.

[Behappyalways]

Jamie Dimon: Fed Has No Choice But to Do QT
https://m.youtube.com/watch?v=MjmfUHeafDk

[specuvestor]

Market corrected sharply on 75bp hike and if July Fed hikes 50bp, market will already be relieved, but still an uphill as we stare at 2Q23 recession.

Freight rates and hard commodity are already coming off. Watch 29th June PCE and June CPI numbers that if it comes off the central thesis remains, except no idea whether Fed will gen-chiong even with CPI trending towards 5% by end of year.

US inflation is likely to peak YoY in 2Q22 because of the higher base in 2021 with Powell's famous Transient comment... Market is already looking to Fed hiking 50bp in June and July so recession coming in 2Q23. That's probably baked in by the markets. That's like 200bp hike within 6 months plus QT. Compare that with BoE 4 hikes that started in Dec21 with the FTSE relatively flat (excluding GBP depreciation) and we can see how Powell lost the script AGAIN

The concern is whether they will hike 50bp again in Sept or 75bp prior as Fed might be concerned of CPI sticky at 2-5% even as CPI likely to trend towards 5% by Dec 2022. If Fed hikes 25bp or stay in Sept and decided to wait and see I think markets will be relieved. But I'm concern about how clueless Powell can be.

[BlueKelah]

Market corrected sharply on 75bp hike and if July Fed hikes 50bp, market will already be relieved, but still an uphill as we stare at 2Q23 recession.

Freight rates and hard commodity are already coming off. Watch 29th June PCE and June CPI numbers that if it comes off the central thesis remains, except no idea whether Fed will gen-chiong even with CPI trending towards 5% by end of year.

US inflation is likely to peak YoY in 2Q22 because of the higher base in 2021 with Powell's famous Transient comment... Market is already looking to Fed hiking 50bp in June and July so recession coming in 2Q23. That's probably baked in by the markets. That's like 200bp hike within 6 months plus QT. Compare that with BoE 4 hikes that started in Dec21 with the FTSE relatively flat (excluding GBP depreciation) and we can see how Powell lost the script AGAIN

The concern is whether they will hike 50bp again in Sept or 75bp prior as Fed might be concerned of CPI sticky at 2-5% even as CPI likely to trend towards 5% by Dec 2022. If Fed hikes 25bp or stay in Sept and decided to wait and see I think markets will be relieved. But I'm concern about how clueless Powell can be.

This fed is not the Paul-Vockler type from 1980s. My take is that next CPI for USA will tip country into recession and another maybe 20% drawdown in markets, maybe more if cryptos totally get wiped out. 

Bear market factors all there, with 
Fed big tightening--> rate rises and 1 June started of QT of 9 trillion balance sheet.
Very likely (IMHO already in recession) recession as a result of above.
Bad inflation affecting consumer sentiment -> Lowest consumer sentiment last reading in 30-40years.
Long term proxy war -> Still supplying weapons in the millions/billions to ukraine.


This inflation will not go down to 5% by end of year as there has been around 40%+ MASSIVE increase in money supply past 2 years (equivalent to all the money printed from past decade!!) which will take at least 1.5-2yrs to filter into the economy. FED already way behind the curve regarding rate rises and can only kill inflation if rates go to 9% or more NOW!. But that will never happen as unlike 1980s USA has record budget deficits and no more reserves with 30++trillion debt. I give them about rate rise to 2.5% before the treasury cannot service the bond repayments.


Market has priced in everything now but has not priced in recession and also the very likely scenario that inflation goes to 10%++ --->STAGFLATION. 

FED will try to stimulate or lower rates again once we get recession and high unemployment just like what happened in the 1970s. History may not repeat exactly but often happens again in similar fashion. 

My take is as the market goes down this year slowly accumulate gold as it will be one of the assets that BOOMs once the FEDs start lowering rates again amidst a high inflation / recession environment. In the event that we get a global monetary system reset or migration to digital yuan or currency/trading blocks that dont use USD to settle, gold will do very well too.

Look at the 1970s to 1980s gold chart you will know what i am talking about with regards to gold during recessionary / inflationary periods.

[specuvestor]

^^ I think it will trend towards 5% by year end but will it be 5.1% or 5.9% I'm not sure. I try to be roughly right than precisely wrong. Inflation is a lagging indicator: the conundrum of low inflation despite QE has come roaring back with Biden's fiscal package when supply chain was tight. this >8% has roots a year ago. PS on gold context do note that Bretton Wood ended in 1971.

I don't think we will go QT again within next 12 months but Burry's view is inline with what I'm thinking as well. If Fed is credible I suspect they should pause or reduce to 25bp hike by September. Powell doesn't have a good track record though

https://www.investing.com/news/stock-mar...SI-2841333

Market corrected sharply on 75bp hike and if July Fed hikes 50bp, market will already be relieved, but still an uphill as we stare at 2Q23 recession.

Freight rates and hard commodity are already coming off. Watch 29th June PCE and June CPI numbers that if it comes off the central thesis remains, except no idea whether Fed will gen-chiong even with CPI trending towards 5% by end of year.

US inflation is likely to peak YoY in 2Q22 because of the higher base in 2021 with Powell's famous Transient comment... Market is already looking to Fed hiking 50bp in June and July so recession coming in 2Q23. That's probably baked in by the markets. That's like 200bp hike within 6 months plus QT. Compare that with BoE 4 hikes that started in Dec21 with the FTSE relatively flat (excluding GBP depreciation) and we can see how Powell lost the script AGAIN

The concern is whether they will hike 50bp again in Sept or 75bp prior as Fed might be concerned of CPI sticky at 2-5% even as CPI likely to trend towards 5% by Dec 2022. If Fed hikes 25bp or stay in Sept and decided to wait and see I think markets will be relieved. But I'm concern about how clueless Powell can be.

[CY09]

In my view, an aggressive QT will do the trick. Currently QT is kept a slow pace of $95 billion per month on the back of a $8 trillion balance sheet. Doubling the rate will dampen the housing market and decrease the money supply