& yet there does seem to be a very curious disjunction between chatter and current-data reality. A great deal of this is clickbait noise-and-fluff, & yet it would seem that there are other, more...
Let's hope that the increasing profit margins of corporations has peaked and will stay steady or decline. Escalating prices are very obvious to shoppers - so one should not just look at core inflation to avoid the volatile food and energy inflation that is of more immediate concern to everyday consumers. https://www.yardeni.com/pub/sp500margin.pdf
Long Live Immaculate Disinflation!
Agreed. It is past time to call out or educate those who discuss inflation in YoY terms. Some know better, most do not (just copy 'stubbornly persistent' narrative from last month). We've also got shelter disinflation that is going to pull down the average for the next year or more.
High debt firms like Verizon and AT&T, if they had to refinance at today's rates, would most or all of their profits erased. As they approach maturity, the odds that their debt is downgraded to junk increases. Such large fallen angels have contagion, credit spreads blow out from current tight levels. I mention it not as a forecast, but to question the wide belief that we can endure risk-free interest rates rising from 0 to 5% at no cost. Long and variable lags lurk.
It would be great if you would address the recently prominent opinion that "R<G" never in fact made an explosion of government spending safe, and that this false comfort set the stage for R>G. Now we are in a vicious cycle of higher rates and higher deficits that should terrify us.
"(a) the Fed’s moves so far have not overdone it as far as policy restriction is concerned."
Do we know that? The EFFR has only been above 10-year TIPS expectation for about one year. [And we do not know what 1, 2, or 3-year expectations are. Why? O Why has Yellen not given us more intermediate tenor TIPS! ] Is it not possible that some long variable lag is yet to come?
What if, after a smooth soft landing, our aircraft smashes into a 5.33% EFFR wall sitting athwart the runway?
The market prices-based core PCE (it doesn't have any categories that have imputed values) grew at a 1.5% 3-month annualized rate.