Daily update
Daily update
- Much of the world enjoyed the May day holiday weekend, relaxing (or, if French, protesting). The US had a banking problem and another act in the debt ceiling farce. First Republic Bank was taken over. The ongoing concern is that banking problems cause banks to engage in the equivalent of precautionary savings—increasing liquidity “just in case.” There are reasons to hope this effect will be limited.
- US Treasury Secretary Yellen told Congress the US could run out of money on 1 June, and US President Biden will summon Congressional leaders to the White House to discuss this. It is to be hoped Biden explains the situation slowly and clearly, possibly using hand puppets, to help Congressional leaders understand the consequences of their inactions.
- The UK BRC shop price index had slower inflation, because non-food prices fell on the month. Food price inflation remains significant. Profit-led inflation is peculiar to the end of supply chains, but growing noise may be starting to turn this around. The Euro area offers some inflation numbers today.
- The US JOLTS labor market data is very likely to be misinterpreted. The JOLTS registers public vacancies, not all vacancies, and so has been inflated by turnover in the labor market. As turnover slows, the JOLTS should decline.
