Christophe Barraud🛢🐳 Profile picture
Jan 13, 2023 10 tweets 5 min read Read on X
🇺🇸 #Fed #Inflation | An update on CPI prospects ⚠

*Leading indicators suggest CPI YoY will normalize quickly in the coming months and, in absence of external shock, could ⬇ close to 3% in June 2023
*Therefore, Bloomberg consensus for 2023 CPI (+4%) should be revised ⬇ soon.
1- Market #rents will keep retracing in the coming months. Household formation and rental demand are slowing in response to macro conditions while #housing supply will gain traction, with a peak expected around 4Q23.
*The collision of these factors will probably result in a contraction of market #rents on a YoY basis at some point next year. In the past, the CPI’s measure of rents for homeowners has typically lagged other measures (9 to 12 months looks appropriate for this cycle).
2- Proxies also point to a downward normalization of food prices’ growth by the end of 2023.
*Agricultural commodity prices – which are usually leading CPI Food prices by 12 months – retraced over the past few months
*Note that fertilizer prices are also down ~50% from the peak
3- Supply chain disruptions eased significantly.
*Several indexes point to a partial normalization at the global level and even a return close to normal in the U.S. (at least in #manufacturing sector).
4- Core good prices are expected to contract on a YoY basis at some point in 2023.
*In this context (easing supply disruptions), wholesalers of finished goods have faced an extremely large rebound in inventories due to weak real consumption and will implement discounts.
5- In addition, there are already signs that used cars and trucks’ prices could contract further on a YoY basis amid significant supply chain improvement for new vehicles.
6- Gasoline price is expected to contribute negatively in the coming months with a maximum base effect in June 2023.
7- Lastly, there are also signs that CPI Services less rent of shelter could also normalize slowly on a YoY basis.
*Labour market momentum has weakened with wages already peaking.
*I mean contraction of market #rents on a YoY basis at some point in 2023.

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Christophe Barraud🛢🐳

Christophe Barraud🛢🐳 Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @C_Barraud

Jul 30
🇨🇳 #CHINA'S POLITBURO HOLDS MEETING: XINHUA - BBG
*CPC LEADERSHIP SETS OUT ECONOMIC PRIORITIES FOR 2H
*POLITBURO:TO CONTINUE TO PREVENT AND RESOLVE RISKS IN KEY AREAS
*POLITBURO: EFFECTIVE DOMESTIC DEMAND INSUFFICIENT
🇨🇳 #CHINA | #POLITBURO: TO PROMOTE STABLE DEVELOPMENT OF PROPERTY MARKET - BBG
*POLITBURO REITERATES PRUDENT MONETARY POLICY
*POLITBURO SEES INCREASING NEGATIVE EXTERNAL IMPACT
*POLITBURO: CHINA STILL FACES INSUFFICIENT DOMESTIC DEMAND
*POLITBURO: SPEED UP USE OF SPECIAL BONDS
*POLITBURO: TO FURTHER IMPROVE HOUSING DELIVERY WORK
*POLITBURO: CHINA ECONOMY DIVERGES WITH MANY RISKS IN KEY AREAS
*POLITBURO SEES TEMPORARY PAINS FROM GROWTH DRIVER TRANSITION
*POLITBURO: NEED TO KEEP STEPPING UP MACROECONOMIC POLICIES
*POLITBURO: NEED TO KEEP STEPPING UP MACROECONOMIC POLICIES
*POLITBURO REITERATES PROACTIVE FISCAL POLICY
🇨🇳 #CHINA | #POLITBURO URGES BETTER USE OF SPECIAL SOVEREIGN BONDS - BBG
*POLITBURO: TO ENSURE ENERGY AND POWER SUPPLY DURING SUMMER
*POLITBURO: FURTHER ENSURE HOUSING DELIVERY
*POLITBURO: SPEED UP BUILDING NEW MODE FOR REAL ESTATE DEV.
*POLITBURO: SUPPORT DEVELOPMENT OF UNICORN COMPANIES
*POLITBURO: TO KEEP YUAN BASICALLY STABLE
Read 5 tweets
Mar 23, 2023
🇺🇸 #Fed #Recession #Inflation | Lower tax refunds, uncertainty regarding the banking sector, upcoming tightening credit conditions and weather normalization should weigh on consumer spending from March ⚠ (1/8) ⬇
🇺🇸 According to latest IRS data, average refunds fell 11% YoY to $2,972 (after boosting spending earlier this year). This dynamic is expected to persist in the short term (2/8)
irs.gov/newsroom/filin…
🇺🇸 Data released after turbulences in the banking sector also suggest consumers became cautious. Citi pointed out that its proprietary credit card data revealed a 10.3% ⬇ in spending in the week-ended 18-Mar., biggest ⬇ since the pandemic began (3/8)
Read 8 tweets
Dec 13, 2022
🇺🇸 #Fed | From #Inflation (Now) To #Deflation Fears (In Late 2023)

*A bit provocative I know but leading indicators suggest that CPI YoY will normalize quickly in the coming months and, in absence of external shock, could return to 2% in late 2023.
*A thread ⬇
1- Market #rents will keep retracing in the coming months. Household formation and rental demand are slowing in response to macro conditions while #housing supply will gain traction in the coming months, with a peak expected around 4Q23 (HT @jayparsons).
The collision of these factors will probably result in a contraction of market #rents on a YoY basis at some point next year. In the past, the CPI’s measure of rents for homeowners has typically lagged other measures of market rents by between 6 and 12 months.
Read 7 tweets
Sep 27, 2022
🇺🇸 (1/10) | As I already warned several times, the #housing #recession has gained traction since July as prices started dropping ⬇

christophe-barraud.com/10-tweets-that…
🇺🇸 (2/10) Today’s figures (Corelogic CS and FHFA) confirmed this assumption. Looking ahead, latest proxies already point to a larger drop in August.

🇺🇸 (3/10) In addition, the recent bounce of #mortgage rates implies that sales’ cancellations will rise, and demand (at least from 1st time buyers) will collapse. As a result, downward pressures are expected to intensify from September.
Read 10 tweets
Aug 25, 2022
🇺🇸 #JacksonHole | Since July #Fed meeting, data point to GDP weakness, housing recession, inflation peak but also lower unemployment rate

1/ GDP: Towards downward revisions
*GDP fell for a 2nd straight quarter in 2Q
*Aug. Composite PMI crashed to 45, lowest since May 2020 ⚠
*Atlanta Fed expects 3Q GDP to be close to 1.5% in 3Q
*Taking into account these figures, it seems that 4Q21/4Q22 GDP growth will be close to 0%
*In June, Fed expected 1.7% growth so there could be a significant downward revision in Sep.
2/ Housing: a key downside risk to GDP projections
*Refinancing index hit the lowest since 2001
*Existing and new home sales fell by >20% YoY
*Inventory rebounded (especially for new home sales)
Read 8 tweets
May 29, 2022
🇨🇳 #China | #Shanghai Unveils Fresh Policies to Support Economy Hit by Covid - Shanghai municipal government
*50 measures in eight categories aimed at stabilizing the city’s economy.
*Link (Chinese): shanghai.gov.cn/nw12344/202205…
🇨🇳 #CHINA | *#SHANGHAI TO REMOVE 'WHITELIST' REQUIREMENT FOR COS. FROM JUNE - BBG
*SHANGHAI TO ADD 40,000 PASSENGER CAR PLATES THIS YEAR
*SHANGHAI TO CUT PURCHASE TAX FOR SOME PASSENGER CARS
*SHANGHAI SUPPORTS COUPON ISSUANCE TO BOOST CONSUMPTION
🇨🇳 #CHINA | *SHANGHAI TO LAUNCH NEW BATCH OF HOUSING PROJECTS - BBG
*SHANGHAI TO IMPROVE HOUSING MARKET POLICY, SUPPORT HOUSING NEEDS
*SHANGHAI TO PROPERLY INCREASE CONSTRUCTION LANDS FOR 2022
Read 5 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us!

:(