Chris Rupkey
Chris Rupkey
businesses energy expect factor fed increased inflation interest major makers pass policy power prices pushing rates received rising sign worried
Prices received rising so much is the first sign that businesses have increased power to pass on these energy-price increases. Energy will shortly be a major factor in the inflation equation, and this is what the Fed is worried about, so expect policy makers to keep pushing interest rates higher.
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Unfortunately, I think they tried to fight the inflation dragon a little too long, and rejected the counsel of the markets which urged them to cut rates as early as November that year.
buyers days eager evidence expected fresh homes lock market mortgage rates taking trend
Buyers may be eager to lock in rates now as mortgage rates are expected to trend higher. Many homes go on the market in the first days of spring, and this is the first real evidence that buyers are taking a fresh look at the market.
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The market is on guard after Broaddus reminded us that the day of reckoning when the Fed raises rates is drawing nearer and the rebound in global stock markets is adding fuel to the fire.
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The selling abated, prices stabilized and people decided the path of least resistance is up.
country entire production running
Manufacturing production in the entire country is running flat-out at the moment.
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Growth isn't fast enough that the Fed has to brake the economy, and at the same time it isn't slow enough that the Fed can stop and watch. Inflation pressures can still gain a foothold as the economy continues to take up slack resources.
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Business capital spending is coming on strong and the timing of these equipment purchases could not be better. Business spending will take up the slack as the housing slowdown cools consumers' appetites.
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While it sounds as if most members see that the series of rate hikes since June 2004 is close to the end, it's not over until the economy slows. The minutes are a little past their stale date. Commodity prices are soaring.
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There is nothing at this point to suggest that Fed officials will pause.
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The red ink was a one-month record in February, and the records are likely to continue to be broken this year. The spending side of the budget ledger remains out of control, despite some effort to constrain these expenditures.
credit due
We were due for a pullback in credit,
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Expectations of Fed action have gone though the roof. The market is looking for two 25-basis-point moves and one 50-basis-point move before the presidential election.
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It suggests that the industrial production setback reported for June is unlikely to last and that production geared up the very next month.