Uddrag fra Macrobond, Apollo, Yardeni og TS Lombard
Inflation expectations stop falling across all time horizons.
Source: Macrobond
Soft reflation…
A soft landing, but into a more reflationary world.
Source: TS Lombard
That 70’s (horror) show
Will we see a repeat of the 1970s? Apollo thinks so.
Source: Apollo
More on that 70’s show
Reflationists have observed that inflation during the first half of the 2020s has traced out a similar pattern to that of the first half of the 1970s, when it also surged and then moderated. They warn that it might now trace out a second inflationary wave as happened during the second half of the 1970s.
Yardeni: “This scenario is one of the ingredients in our bearish cauldron. During the 1970s, two geopolitical crises in the Middle East caused oil prices to soar, resulting in the Great Inflation of the 1970s.”
Source: Yardeni
Well above the target
Fed measures of inflation stickiness are well above the Fed’s 2% inflation target.
Source: Apollo
Reacceleration on many fronts
Core CPI showing signs of reaccelerating. Core PCE, supercore CPI & CPE too.
Source: Apollo
Acyclical too
Acyclical inflation starting to rise.
Source: Apollo
Both short & long-term expectations
Short-run inflation expectations rebounding.
Source: Apollo
Source: Apollo
The tail is gone
The inflation tail has disappeared. Too complacent?
Source: TS Lombard
Could China stimulus reflate the word?
Not what consensus expects…
Source: TS Lombard
Proceed more cautiously
“Fed officials might prefer to proceed more cautiously in light of the uncertainty about the new administration’s policies, especially the impact of potential tariff increases on consumer prices.” (Goldman)
Source: Goldman
Disinflation is dead
“….because the Fed models the funds rate against PCE inflation data, they have one more 25BP cut to get to neutral (Dec 18) and then, given the landscape, have every reason to stop. They will retain their policy optionality by declaring a “pause”. If market expectations for the funds rate shifts to my view, that is a 4.25% floor and modest hiking in 2026 back to 5.25%, the 10Y moves over 5%, without a wider term premium. Higher yields, steeper curve over the next 12 months.” (Blitz)
Source: TS Lombard
Hiking prices
November’s survey of small business owners by the National Federation of Independent Business showed that 24% are raising prices and 28% are planning to do so. Those are low readings compared to the spike during 2022. But they are still relatively high compared to the pre-pandemic history of both series.
