Tag Archives: inflation

Yesterday, HSBC prepared the ground for imposing negative rates on business depositors. This is an excerpt from HSBC's letter announcing the necessary change to the Terms & Conditions of HSBC business accounts:   Now, this requires some explanation. Firstly, the change applies only to BUSINESS accounts. Retail depositors are unaffected. Secondly, it applies only to currency accounts, not sterling accounts. And thirdly, despite HSBC's mention of "negative rates set by central...

One of the Fed’s mandates. The ‘headline’ number is below target due to the energy impulse, but the ‘core’ rate, led by services, is on target. The question is whether energy prices, if they remain at current levels, will ‘pull down’ other prices. And the comparisons with last year are now vs the lower numbers that were released after the oil price collapse. And not to forget that the Fed uses futures prices as indications of future spot prices, even for non perishables, which technically...

Excerpts from the Speech by Mario Draghi, President of the ECB, Economic Club of New York, 4 December 2015: There is no particular limit to how we can deploy any of our tools. True- limits are political And in this context it is important to recall that we operate under a clear framework of monetary dominance – we are ultimately driven by our mandate of maintaining price stability. True Indeed, it is inevitable that unconventional policy settings, ranging from negative interest rates to...

"The euro area economy is gradually emerging from a deep and protracted downturn. However, despite improvements over the last year, real GDP is still below the level of the first quarter of 2008. The picture is more striking still if one looks at where nominal growth would be now if pre-crisis trends had been maintained." So said Peter Praet, Member of the Executive Board of the ECB, in a recent presentation to the FAROS Institutional Investors' Forum.He's not wrong. From his presentation,...

Part of the Fed’s mandate is to hit it’s 2% inflation target:Still at recession type levels:This is also what recession looks like:The anointed ‘driver of the economy’ continues to falter as previously discussed: Housing Market IndexHighlightsThe housing market index from the nation’s home builders shows weakness, at 62 for November and missing the Econoday consensus by 2 points. And compared to a revised October, the index is down 3 points. Yet readings in the report, though slowing,...

More deflation news here: PPI-FD Nothing good here, and of course sales = income, so lower sales = lower incomes. Also, the boost to prior months from car sales looks like it’s fading: Retail SalesHighlightsRetail sales slowed in October but fundamentally remain solid. Sales rose only 0.1 percent, 2 tenths under the Econoday consensus. But when excluding vehicles, which slipped back after surging in prior months, and when also excluding gasoline stations, where sales once again fell on...

Along with most indicators, this one turned south as oil capex collapsed: Update: Framing Lumber Prices down Sharply Year-over-year Here is another graph on framing lumber prices. Early in 2013 lumber prices came close to the housing bubble highs.The price increases in early 2013 were due to a surge in demand (more housing starts) and supply constraints (framing lumber suppliers were working to bring more capacity online).Prices didn’t increase as much early in 2014 (more supply, smaller...

My understanding is that this series includes premiums paid for health insurance and so GDP has gotten a one time boost from from the newly insured who are now paying insurance premiums via the affordable care act. So Q4 should see another reduction and growth and a lower contribution to GDP growth:This kind of personal consumption collapsed with the collapse in oil prices and oil capex: This is for September, and is slowing as previously discussed after permits peaked in June with the...

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CPI, Empire State Survey, Philly Fed, Brent Crude Price, Previous Banking Post Consumer Price IndexEmpire State Mfg Survey HighlightsMinus signs sweep the Empire State report with the headline at minus 11.36 which is more than 1 point below Econoday’s low end estimate. Looking at individual readings, new orders are in very deep trouble at minus 18.92 for a fifth straight month of contraction. And manufacturers in the region are not going to be able to turn to unfilled orders to keep busy...