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☆ US consumer spending slows; labor market steadily easing
▼ + stars: | 2023-11-30 | by ( Lucia Mutikani | ) www.reuters.com time to read: +7 min

Those hopes were reinforced by other data on Thursday showing the labor market gradually easing. Though wages remain elevated, the pace of increase has slowed from earlier in the year as the labor market eases. Personal consumptionINFLATION COOLINGInflation as measured by the personal consumption expenditures (PCE) price index was unchanged in October after rising 0.4% in September. Stripping out housing, the core PCE price index edged up 0.1% after gaining 0.3% in September. Still, the labor market is cooling in tandem with overall demand in the economy.

Persons: Sarah Silbiger, Jerome, Powell, Conrad DeQuadros, Nancy Vanden Houten, Lucia Mutikani, Chizu Nomiyama, Andrea Ricci Organizations: El Progreso Market, Washington , D.C, REUTERS, Brean, Commerce Department's, United Auto Workers, Treasury, Fed, Labor Department, Oxford Economics, Thomson Locations: Mount Pleasant, Washington ,, New York, outlays, U.S

"Monetary policy is in a good place for policymakers to assess incoming information on the economy and financial conditions," Cleveland Fed President Loretta Mester said on Wednesday. The Fed has kept its policy rate unchanged in the 5.25%-5.50% range since July, and after the last meeting over Oct. 31-Nov. 1, Fed Chair Jerome Powell said he is not yet confident policy is restrictive enough. Fed Governor Christopher Waller, a policy hawk like Mester, on Tuesday delivered a similar assessment. Indeed, Waller said, if the inflation decline continues for several more months, rate cuts could be in order to keep policy from becoming overly tight. Atlanta Fed President Raphael Bostic, who has for months said the Fed policy rate at 5.25%-5.50% is high enough, said Wednesday he feels data backing that view is getting clearer.

Persons: Sarah Silbiger, Loretta Mester, Mester, Jerome Powell, Christopher Waller, Waller, I'm, Thomas Barkin, Barkin, Raphael Bostic, we’ve, Lindsay Dunsmuir, Deepa Babington Organizations: El Progreso Market, Washington , D.C, REUTERS, Cleveland Fed, Richmond Fed, CNBC, Dallas Fed, Reuters, Atlanta Fed, Thomson Locations: El Progreso, Mount Pleasant, Washington ,

A recently edgy bond market gobbled all that up. Funds' bonds allocation in November soared 18 points over the month to leave them net 19% overweight - almost 3 standard deviations above long-term averages. Asset managers' overweight bond positions - or at least those in government bonds and U.S. Treasuries - tends to be mirrored by big short positions in Treasury futures among speculative hedge funds. CFTC numbers show the scale of that speculative 'Big Short' on the flipside of the mounting 'Big Long' built by regular asset managers. Lamont points out that U.S. Treasury yields and investment grade corporate debt yields would have to rise about another 100bps for the capital losses to wipe out current yields.

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[1/2] A woman shops for groceries at El Progreso Market in the Mount Pleasant neighborhood of Washington, D.C., U.S., August 19, 2022. The U.S. banking sector was in turmoil in the spring as Silicon Valley Bank abruptly collapsed after grappling with large amounts of unrealized losses spurred by rapidly rising interest rates. She said reinflation was a risk, especially if banks do not correctly anticipate interest rate moves and adjust their portfolios appropriately. That led to unrealized losses across the sector coming under closer scrutiny. Global banking and securities regulators are also still grappling with the fallout from the collapse of Credit Suisse Group (CSGC.UL).

Persons: Sarah Silbiger, Ana Arsov, Arsov, reinflation, ” Arsov, Tim Wennes, Paul Servais, Paritosh Bansal Tatiana Bautzer, Megan Davies, Lisa Shumaker, David Gregorio Our Organizations: El Progreso Market, Washington , D.C, REUTERS, Reuters, Banco Santander, Global, Credit Suisse Group, UBS, Jean, International Organization of Securities Commissions, Financial, Swiss, Thomson Locations: Mount Pleasant, Washington ,, U.S, SVB

☆ Inflation to dog world economy next year, postponing rate cuts: Reuters poll
▼ + stars: | 2023-10-27 | by ( Hari Kishan | ) www.reuters.com time to read: +4 min

Despite broad success in bringing inflation down from its highs - the easier bit - prices are still rising faster than most central banks would prefer and hitting their inflation targets is likely to be tough. The Reserve Bank of New Zealand, which often leads the interest rate cycle, was also forecast to wait until July-September 2024 before cutting. The majority backing no cuts until the second half of 2024 has also grown stronger for the Reserve Bank of Australia, Bank Indonesia and the Reserve Bank of India. Even the Bank of Japan, the outlier sticking to ultra-loose policy through this entire round of inflation, is now expected to abandon negative interest rates next year. Crucially, most economists agree the first easing steps will not be the beginning of a rapid series of cuts.

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☆ Gasoline, food drive US producer prices higher; core inflation cools
▼ + stars: | 2023-10-11 | by ( Lucia Mutikani | ) www.reuters.com time to read: +6 min

The so-called core PPI increased 2.8% on a year-on-year basis in September after climbing 2.9% in August. Wholesale goods prices increased 0.9%, with a 3.3% rise in the cost of energy products accounting for nearly three-quarters of the increase. Excluding the volatile food and energy components, core goods prices edged up 0.1% for the second straight month. This mostly reflected the normalization of supply chains, whose disruption fueled goods inflation in the aftermath of the COVID-19 pandemic. Though core inflation is cooling, higher gasoline and food prices could hamper progress by raising the cost of other goods as well as causing consumers to expect inflation to rise.

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The central bank's quest for a "soft landing" of more slowly rising prices and continued economic growth looks increasingly probable. In fact, the U.S. may hit a sweet spot just as the 2024 presidential election campaign crescendos next year. Rather than cheering, though, after years of economic turbulence since the coronavirus pandemic erupted in 2020, Americans grumble, at least if you ask them about the economy. With fast rising prices and the end of an array of pandemic-era government benefit programs, inflation-adjusted household income fell last year, and the poverty rate increased. A Biden adviser said the White House understands that the economy and inflation are a critical issue, and the campaign has a big media push planned on "Bidenomics."

Persons: Sarah Silbiger, Jerome Powell, crescendos, grumble, Joe Biden, Donald Trump, Jimmy Carter's, Ronald Reagan, George H, Bush, Democrat Bill Clinton, Clinton, Biden, They've, that's, Robert Shiller, stupidly, Shiller, Powell, Howard Schneider, Trevor Hunnicutt, Heather Timmons, Paul Simao Organizations: El Progreso Market, Washington , D.C, REUTERS, Rights, . Federal, Reuters, Republican, Biden, Democrat, U.S . Consumer, Yale University, McKinsey & Company, McKinsey, Thomson Locations: Mount Pleasant, Washington ,, U.S

☆ Morning Bid: Caution the watchword for inflation tests
▼ + stars: | 2023-08-07 | by ( ) www.reuters.com time to read: +3 min

[1/2] Produce is seen at El Progreso Market in the Mount Pleasant neighborhood of Washington, D.C., U.S., August 19, 2022. REUTERS/Sarah Silbiger/File PhotoA look at the day ahead in European and global markets from Wayne Cole. It's been a slow start in Asia, with little in the way of market-moving news over the weekend. Both Bank of America and JPMorgan last week ditched their forecasts for a U.S. recession and embraced the soft landing theme. Inflation figures from the United States and China will be major tests for investors this week.

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☆ Morning Bid: Relief over US inflation keeps Asia upbeat
▼ + stars: | 2023-07-14 | by ( ) www.reuters.com time to read: +2 min

[1/2] A woman shops for groceries at El Progreso Market in the Mount Pleasant neighborhood of Washington, D.C., U.S., August 19, 2022. Indeed, Friday's rise in the yen put it within striking distance of its converging 100-day and 200-day moving averages near 137.00 to the dollar. The Reserve Bank of Australia was also in the spotlight in Asia, with the much-anticipated announcement of its next governor. The rest of the day is light on economic data with euro zone May trade, U.S. export and import prices and University of Michigan consumer sentiment the main releases. But it's a bumper day for bank earnings as JPMorgan Chase (JPM.N), Citigroup (C.N), Wells Fargo (WFC.N) and BlackRock (BLK.N) are all due to report second-quarter results.

Persons: Sarah Silbiger, Sonali Desai, Michele Bullock, JPMorgan Chase, Luis de Guindos, Edmund Klamann Organizations: El Progreso Market, Washington , D.C, REUTERS, Treasury, Bank of, People's Bank of China, The Reserve Bank of Australia, University of Michigan, JPMorgan, Citigroup, BlackRock, Hollywood, Central Bank, JPMorgan Chase, Thomson Locations: Mount Pleasant, Washington ,, Asia, Japan Asia, U.S, Wells Fargo, Brussels U.S

☆ US economy shifts into disinflation mode; consumer prices rise modestly
▼ + stars: | 2023-07-12 | by ( Lucia Mutikani | ) www.reuters.com time to read: +7 min

That was the smallest year-on-year increase since March 2021 and followed a 4.0% rise in May. The year-on-year CPI is slowing in part as last year's large rises drop out of the calculation. It was the first time in six months that the so-called core CPI did not post monthly gains of at least 0.4%. Services prices rose 0.3%, matching May's gain. Economists view the ISM services prices paid measure as a good predictor of personal consumption expenditures (PCE) inflation.

Persons: Christopher Rupkey, Joe Biden, Chris Zaccarelli, Sarah Silbiger, Michael Gregory, Lucia Mutikani, Chizu Nomiyama, Andrea Ricci Organizations: Federal Reserve, Labor Department, Fed, Reuters Graphics, CPI, Reuters, Independent, Treasury, El Progreso Market, Washington , D.C, REUTERS, Institute, Supply, BMO Capital Markets, Thomson Locations: WASHINGTON, U.S, New York, Charlotte , North Carolina, Mount Pleasant, Washington ,, Toronto

☆ US consumer prices post modest gains; economy shifts into disinflation mode
▼ + stars: | 2023-07-12 | by ( Lucia Mutikani | ) www.reuters.com time to read: +5 min

U.S. Treasury prices rose. It was the first time in six months that the so-called core CPI did not post monthly gains of at least 0.4%. In the 12 months through June, the core CPI rose 4.8%. Core inflation is expected to continue receding in the months ahead, with the labor market cooling and independent measures showing rents on a downward trend. Economists view the ISM services prices paid measure as a good predictor of personal consumption expenditures (PCE) inflation.

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☆ IMF urges Fed, central banks to keep tightening to reduce inflation
▼ + stars: | 2023-06-08 | by ( ) www.reuters.com time to read: +2 min

IMF spokesperson Julie Kozack said inflation momentum has slowed in the United States, but remained a pressing concern. The IMF warned in April that lurking financial system vulnerabilities could erupt into a new crisis and slam global growth this year, edging its 2023 global growth forecasts lower. "We believe that central banks should stay the course on monetary tightening to decisively reduce inflation." "We also see that inflation momentum has slowed, but that inflation does remain a pressing concern," Kozack said. "Our advice remains unchanged, which is that the Fed would need to stay the course on monetary policy to ensure a durable reduction in inflation and to ensure that inflation expectations ... remain well-anchored."

Persons: Sarah Silbiger WASHINGTON, Julie Kozack, Kozack, Andrea Shalal, Paul Simao Organizations: El Progreso Market, Washington , D.C, REUTERS, Monetary Fund, U.S . Federal Reserve, IMF, Thomson Locations: Mount Pleasant, Washington ,, United States, U.S

☆ Soaring rent, food costs keep U.S. inflation on front burner; labor market tight
▼ + stars: | 2022-10-13 | by ( Lucia Mutikani | ) www.reuters.com time to read: +7 min

Food prices increased 0.8%, with the cost of food at home advancing 0.7% amid rises in all six major grocery store food groups. The war in Ukraine also poses an upside risk to food prices. In the 12 months through September, the CPI increased 8.2% after rising 8.3% in August, decelerating for a third straight month. The so-called core CPI is being largely driven by the higher costs for rental accommodation. The core CPI jumped 6.6% in the 12 months through September, the most since August 1982, after rising 6.3% in August.

☆ U.S. faces 'larger-than-usual' risks in inflation battle, OECD says
▼ + stars: | 2022-10-12 | by ( Lindsay Dunsmuir | ) www.reuters.com time to read: +3 min

A woman shops for groceries at El Progreso Market in the Mount Pleasant neighborhood of Washington, D.C., U.S., August 19, 2022. "Inflation may prove surprisingly persistent, prompting more aggressive tightening of monetary policy," the Paris-based intergovernmental organisation said. There is rising concern among investors that the speed of Fed rate increases is stressing the global economy and outrunning the central bank's ability to monitor the effect it is having. The International Monetary Fund on Tuesday cut its global growth forecast for 2023 and forecast that a third of the world economy will likely contract by next year. "Nonetheless, considerable flexibility is warranted and policy deliberations will benefit from careful monitoring of the impact," of the global factors driving up inflation, the OECD said, as well as "the tightening of financial conditions on the economy."

☆ Factbox: Government measures to ease inflation pain
▼ + stars: | 2022-09-27 | by ( ) www.reuters.com time to read: +5 min

In August, the government offered debt relief to former students and unveiled the $430 billion "Inflation Reduction Act". * Canada on Sept. 13 announced a C$4.5 billion ($3.29 billion) relief package. * Poland will spend over 30 billion zlotys ($6.07 billion) to freeze power prices and support companies. * The Czech Republic will cap electricity and gas prices next year. * Croatia will cap electricity prices from Oct. 1 until March.

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