Daily Charts - Inflation
CPI YoY broken down by category. Food and energy driving inflation. It’s hard to agree with the shelter calculation, could be biased by what is happening in Toronto.
CPI MoM, energy prices declined, in March we had the impact of Russia/Ukraine show up.
The Cleveland Federal Reserve publishes a trimmed mean (excluding the biggest outliers in either direction), and a median for the consumer price index. These are widely regarded as solid measures of underlying inflationary pressure. And both set new highs for the history of the series, which started in 1983
The Atlanta Fed publishes an index of “sticky” prices for goods and services whose prices need to be set well in advance and are difficult to change quickly. What a central bank really wants to avoid is any acceleration in sticky price inflation, because by definition it will be very hard to bring down again. Sticky prices stayed well under control early last year; now, the year-on-year sticky price inflation index is at a 30-year high, while the annualized rate for last month was even higher. Regrettably, this is evidence that whatever transitory shocks happened last year are now prompting a more lasting change
As mentioned earlier, the owners’ equivalent is the most controversial calculation, with mortgage rates rising, existing home ownership should trend in the same direction as rent. They smooth the calculation over a 12 month period, it will inevitably lag.
Deutsche Bank thinks upward pressure will continue on rents.
Housing prices are up significantly YoY in the US.
The US 30 year mortgage continues to rise, up to 5.6% now, since the chart was made. This should cool demand for housing purchases.
The rise in the 10-year Treasury yield has now brought it above the dividend yield paid on the FTSE EPRA/NAREIT index of US REITs. This caused REITS to sell-off recently. If yields continue to rise, RE will be pressured.
Did we just live through the dot com bust 2.0? We should expect venture funding to slow once existing funds blow through their dry powder.
Revisiting Luna, it has fallen 99.7%. A defi experiment gone wrong, it was the 10th largest crypto currency by market cap. I could be proved wrong but this does not change anything about the crypto thesis. It’s like writing off the internet because pets.com went bankrupt. I imagine it will slow adoption and be a hurdle for institutional adoption. We will see.
The Luna pain has spread to broader crypto markets.
American household sentiment is starting to shift, households remain strong relative to the past.
