Daily update
Daily update
- Federal Reserve Chair Powell wants further inflation declines before the Fed cuts rates. US inflation is already at or near target for the prices over which the Fed has control. Last month’s consumer price inflation did surprise to the upside, mainly because of rents in the city of Detroit.
- Yesterday’s US producer price inflation was a reminder of why “data dependency” is a bad idea. The March figures were revised significantly lower. The April data was higher (and of course may also be revised) but not in ways that are likely to push up today’s consumer prices. Financial services prices are pushing inflation higher (it should be noted the price of economists is not contributing to this).
- The middle-income consumer should support today’s US retail sales data as homeowners experience less inflation (and more spending power) than headline numbers suggest. President Biden’s new consumer taxes (announced yesterday) are unlikely to dampen this. As new trade taxes are announced, China claims to have exported 21% more vehicles to the US than the US claims to have imported in the past 12 months.
- Swedish inflation moderated—the Riksbank rate cut is following inflation lower. On a harmonized measure, Swedish inflation is basically the same as that of the US.
