Inflation has not peaked nor slowed down..!
I remember last month's forecasts of Goldman Sacks for a lower expectations Inflation rate, but the actual number was hotter than expected and also 1.5x of the average of the past 24 months..!
In 2 days, CPI data will be out (August 10), and with the current momentum, we should not expect a much lower number for July.
The consensus for the July Inflation rate is 8.7. This is a -0.4% rate of change, while the previous month's rate of change was +0.535; I think it is very unlikely that we see the actual number close to the consensus number!
Why is this important?
Because all those speculators who predicted FED will pivot its hawkishness, can not back their claim with any data..!
Inflation is a global phenomenon..!
The most reliable narrative is coming from England: the prediction of Soaring prices is likely to drive consumer price inflation to 13.3% in October, from 9.4% in June, the bank of England said. That will push Britain into recession later this year, with economic output declining each quarter from the fourth quarter of 2022 through the fourth quarter of 2023, bank forecasts show.(npr.org)
I think this will be the scenario for the US too..!
But according to Bloomberg:
"The rate on swap contracts for the September Fed meeting rose as much as 12 basis points to 3.03%, some 70 basis points above the current effective fed funds rate of 2.33%. That implies a hike of at least 50 basis points is seen as definite and a two-in-three chance that it could be 75 basis points.
The surge in short-maturity yields briefly saw the two-year 44 basis points higher than the 10-year, a degree of inversion last seen in 2000, before stabilizing at around 40 basis points higher."
Fed Governor Bowman sees ‘similarly sized’ rate hikes ahead after three-quarter point moves
“My view is that similarly sized increases should be on the table until we see inflation declining in a consistent, meaningful, and lasting way,” she added in a speech Saturday. August 6th.
Conclusion:
The predictions for FED pivoting hawkishness in July by many is premature and not supported by data!
Action plan:
I will bet on higher Inflation, Higher interest rates, Lower GDP, and the possibility of the stock market and Crypto market breaking below their previous lows!
Best,
In 2 days, CPI data will be out (August 10), and with the current momentum, we should not expect a much lower number for July.
The consensus for the July Inflation rate is 8.7. This is a -0.4% rate of change, while the previous month's rate of change was +0.535; I think it is very unlikely that we see the actual number close to the consensus number!
Why is this important?
Because all those speculators who predicted FED will pivot its hawkishness, can not back their claim with any data..!
Inflation is a global phenomenon..!
The most reliable narrative is coming from England: the prediction of Soaring prices is likely to drive consumer price inflation to 13.3% in October, from 9.4% in June, the bank of England said. That will push Britain into recession later this year, with economic output declining each quarter from the fourth quarter of 2022 through the fourth quarter of 2023, bank forecasts show.(npr.org)
I think this will be the scenario for the US too..!
But according to Bloomberg:
"The rate on swap contracts for the September Fed meeting rose as much as 12 basis points to 3.03%, some 70 basis points above the current effective fed funds rate of 2.33%. That implies a hike of at least 50 basis points is seen as definite and a two-in-three chance that it could be 75 basis points.
The surge in short-maturity yields briefly saw the two-year 44 basis points higher than the 10-year, a degree of inversion last seen in 2000, before stabilizing at around 40 basis points higher."
Fed Governor Bowman sees ‘similarly sized’ rate hikes ahead after three-quarter point moves
“My view is that similarly sized increases should be on the table until we see inflation declining in a consistent, meaningful, and lasting way,” she added in a speech Saturday. August 6th.
Conclusion:
The predictions for FED pivoting hawkishness in July by many is premature and not supported by data!
Action plan:
I will bet on higher Inflation, Higher interest rates, Lower GDP, and the possibility of the stock market and Crypto market breaking below their previous lows!
Best,