10 Things You Need To Know: May 17, 2022
Key data releases this week include: retail sales (Tue), industrial production (Tue), NAHB Housing Market Index (Tue), housing starts (Wed), existing home sales (Thu), and leading economic indicators (Thu).
Haver
May 11, 2022
The Consumer Price Index rose by 0.3% last month as expected in the Action Economics Forecast Survey, following a 1.2% March rise. The 8.3% y/y gain was below the 8.5% y/y pace set in March. Prices excluding food & energy rose an expected 0.6% last month, doubling the March rise. It was the strongest increase in three months.
Haver
May 12, 2022
The Producer Price Index for Final Demand increased 0.5% during April following a record 1.6% increase during March. The y/y increase in the PPI overall moderated slightly to 11.0%. A 0.6% increase had been expected in the Action Economics Forecast Survey. Prices less food & energy increased 0.4% (8.8% y/y) after increasing 1.2% in March. A 0.7% rise had been expected.
EUobserver, Financial Times
May 12, 2022 , May 11, 2022
European Central Bank President Christine Lagarde said the ECB will raise rates after it ends its asset buying, a statement economists concluded is a signal that the bank will raise interest rates at its July meeting. Lagarde declined to put a date on the interest rate decision, saying that economic growth in the eurozone remains “uncertain.”
Barron’s
May 16, 2022
While some elements of the current labor market might be fleeting, a number of others look likely to endure. Baby boomer retirements and a drop-off in immigration mean the pool of available workers has shrunk in what could be a lasting way. Public support for labor unions has surged to its highest level since 1965, while the number of union-representation filings in the fourth quarter of 2021 climbed at its highest rate in nearly two decades.
Barron’s
May 16, 2022
Regulators worry that if stablecoins take off as privately issued digital money, they could pose risks to broader markets and monetary policies. A run on a stablecoin could, in theory, lead to heavy selling in assets held as reserves for coin issuers, such as commercial short-term debt. Stablecoins could also substitute for the dollar in international commerce and cross-border payments—making it harder for governments to keep tabs on monetary policies and capital flows.
Barron’s
May 16, 2022
On Thursday, the number of S&P 500 stocks trading at 52-week lows hit their highest level of 2022 and are unlikely to increase much further, while the CNN Money Fear & Greed Index traded as low as two before closing at six, levels that can’t get much lower. Even the TICK Index, a measure of the number of winning versus losing stocks on the NYSE, traded below -1500 for a sixth day in a row, a sign of extreme selling. Such washouts can lead to quick moves higher.
Financial Times
May 12, 2022
Federal Reserve Chair Jerome Powell has offered a downbeat appraisal of the fight against inflation, saying that reducing inflation to a targeted 2% is not without challenge and that avoiding recession depends on factors outside the Fed’s control. “The process of getting inflation down to 2% will also include some pain, but ultimately the most painful thing would be if we were to fail to deal with it and inflation were to get entrenched in the economy at high levels,” Powell says.
Bloomberg
May 11, 2022
Former Federal Reserve Bank of New York President Bill Dudley said the U.S. central bank should stop “sugarcoating” its message on how high interest rates need to go — and how much pain that will cause — to get inflation under control. “I was 3 to 4 (percent) maybe six months ago. Now I’m 4 to 5 and it wouldn’t shock me if I’m 5 to 6 a few months from now,” said Dudley.
Bloomberg
May 10, 2022
Securities and Exchange Commission Chair Gary Gensler said crypto exchanges are “commingling” the various functions of their business in ways that may not be in the best interests of their customers. “In fact, they’re trading against their customers often because they’re market-marking against their customers,” he said.