Daily update
Daily update
- The US Federal Reserve is expected to raise rates, slowing the pace of tightening to a quarter point. Fed Chair Powell’s chant of “hike, hike, hike” seems to be running on autopilot. The press conference still suffers from Powell’s June policy errors, when forward guidance was trashed. Markets have less reason to believe forward guidance, forcing the Fed to be ever more implausibly shrill in its statements about future policy.
- US labor market data comes with the release of JOLTS numbers, which include “vacancies”. The survey response rate for this data has collapsed, making the quality questionable. The vacancy number does not report actual vacancies, only externally advertised vacancies. Hiring rates are very high, suggesting a lot of the “vacancy” rise post pandemic has been about people changing company.
- Euro area consumer price inflation for January is expected to show some decline (the Dutch numbers were published today with a sizeable drop). Markets tend to emphasize the national data, rather than the aggregation.
- The UK BRC shop price index rose, with food prices in shops rising rapidly. Farm gate prices are generally falling or rising far less than food prices in stores, and wage growth is less than half store food price inflation. This does not suggests cost push inflation.
