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US banks reported strong annual earnings growth, yet their shares fell. Quarterly momentum, credit-loss provisions and refinancing risks help explain the market reaction.
Read US banks' quarterly results through borrowing demand, interest margins and repayment pressure to understand how high rates affect demand and inflation.
The Fed's 2% inflation target emerged as a compromise among price stability, policy flexibility, and wage adjustment. Its role is to anchor long-term expectations, rather than serve as a monthly performance benchmark.
August's PCE reading appeared to show cooling inflation, but annual revisions changed the July baseline. On a consistent basis, headline and core inflation showed no further cooling.
The Fed's 2% target is an anchor, not a switch that must be reached before rates can change. Its latest projections point to a multiyear return to target, while the next PCE release will also require careful treatment of annual revisions.
Most of the one-day rise in the 10-year Treasury yield came from real yields, rather than inflation compensation. The broader curve move points to a repricing of the policy path and the cost of capital, with consequences for financing and asset valuations.
Diesel has hit a nominal price record even though crude oil has not. High refining premiums, near-full refinery utilisation, thin inventories, and limited overseas supplies help explain the divergence—and the resulting pressure on freight costs and goods prices.
The Bank of Japan raised rates despite a small dip in core CPI, focusing on underlying pressures and the transmission of upstream costs. A wide US–Japan rate gap still limits support for the yen.
A unanimous 25-basis-point increase moved short-term yields more than long-term yields. The dot plot points to possible further hikes, but records individual forecasts rather than a settled policy path.
Mortgage rates have risen even as the Fed has stayed on hold. Expectations for future policy rates and compensation for long-term risk both shape borrowing costs at the far end of the yield curve.
Forecasts for the end of tightening diverge as policy credibility, election timing and energy supply shocks interact. Prolonged high rates change borrowing costs, rather than providing a simple trading signal.
The dot plot shows officials’ views of appropriate future interest rates. Read the medians, the dispersion of dots and the economic projections together, while distinguishing expectations from a fixed policy timetable.
Logan questioned whether existing policy was restrictive enough, while Waller wanted more evidence that inflation was improving. Futures probabilities are not votes, and asset effects depend on more than the decision alone.
Annual core CPI inflation fell, but an unexpectedly firm monthly increase lifted rate-hike expectations. Annual and monthly measures can move in opposite directions, and a trend still requires consistent follow-up data.
An energy shock is pushing central banks towards tighter policy. Simultaneous increases do not cancel out risk: they raise refinancing costs, while long-term yields also reflect supply, term premia and geopolitical risks.
The Fed and the fiscal authorities weigh different costs. Inflation and employment constrain monetary policy, while interest bills create a more immediate fiscal pressure.
With oil approaching $100, vulnerability depends on both energy buffers and the ability to pay for imports. Ample reserves cannot eliminate the cost of expensive energy.
Persistent inflation, a change in policy leadership and revised employment data have reversed rate expectations. Cuts have been priced out, but a hike is not yet certain.
The dollar index depends on its counterpart currencies. A stronger yen, mixed Fed signals and an unreleased CPI report help explain why hike expectations have not delivered a stronger dollar.
A strong August payroll report and upward revisions revived hike expectations. The composition of job gains and modest wage growth still leave the trend open to confirmation.
Elevated credit-card debt and new delinquencies call for a distinction between old bad debt and fresh payment stress, alongside the links between savings, inflation and consumption.
Weak employment and high inflation leave markets wary of both strong and weak payrolls. Job gains, unemployment and wages will jointly shape September rate expectations.
Inflation, hike expectations and fiscal pressure are driving a global bond selloff. Japanese yields and currency intervention also raise questions about capital flows and Treasury spillovers.
Why the Fed is paying renewed attention to money supply, and how M2 growth relates to inflation and the policy framework.
Distinguish a futures-implied probability from a policy decision, and track the data that could change September rate expectations.
Warsh explains his approach to policy discipline and forward guidance, while markets reassess the outlook for interest rates.
Strong AI-driven revenue growth sits alongside memory-cost pressure, inflation risks and sensitivity to interest rates.
Sticky inflation, stalled real spending and shifting futures prices complicate the September policy outlook, ahead of statistical revisions.
A historical look at safe-haven flows, wartime interest-rate controls, inflation and fiscal pressures on Treasury yields.
Japan’s divergent markets raise questions about the wage-inflation cycle, exchange-rate trade-offs and the fiscal cost of higher rates.
Sticky inflation, fiscal deficits and term premiums are contributing to a global repricing of long-term financing costs.
Energy costs reach consumers through a chain of production, distribution, margins and time lags rather than a one-for-one pass-through.
CPI, PPI and retail sales show easing price pressures and weaker consumption, while markets shift towards a September pause.
July PPI came in below expectations, but producer and consumer prices need to be interpreted using their different scopes.
How a 2.29% breakeven is calculated, why it differs from a current CPI reading, and what its movement can tell us.
Higher real rates can raise the opportunity cost of holding gold. Subtracting current CPI from a nominal yield illustrates purchasing power, but is not the same as the ten-year TIPS real yield.
Oil affects household costs through refining, fuel, transport and retailing, with no fixed pass-through or timetable. Headline and core CPI need to be assessed together.
What CPI and PPI measure, how costs can reach consumers, and why the difference between the two is not a profit-margin measure.
