1 - #ConnectingTheDots The Bloomberg economist consensus for January is out
Expectations are for a "hot" month-on-month number, that annualises at ~5-6%
A significant step-up from recent prints
Expectations are for a "hot" month-on-month number, that annualises at ~5-6%
A significant step-up from recent prints
2 - What's the reason?
Simple - many fees, bills and contracts reset in January (example below)
Inflation was very high last year, so this seasonal effect should be very pronounced this year
Simple - many fees, bills and contracts reset in January (example below)
Inflation was very high last year, so this seasonal effect should be very pronounced this year
https://twitter.com/NickTimiraos/status/1622306046210412544
3 - Meanwhile, underlying inflation trends continue to weaken
https://twitter.com/thomas_hepner/status/1622281204195102723?s=20&t=Y58BUp2j1djgNH2gNqPnjg
4 - Still, markets likely take the data at face value, and will fret about an inflation resurgence
Just as everyone's back in the boat again
Thus, we likely see both stocks and bonds sell off into the CPI print
Just as everyone's back in the boat again
Thus, we likely see both stocks and bonds sell off into the CPI print
https://twitter.com/fkronawitter1/status/1621163927207022592?s=20&t=otX4FPRpbnsZSsTdMilzKw
5 - For Treasuries, a sell off likely represents the last chance to load up before the economy gets hit hard, which I expect in Q2
nexteconomy.substack.com/p/hard-landing…
nexteconomy.substack.com/p/hard-landing…
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