No. of Recommendations: 14
Links and charts in the cross-post:
https://discussion.fool.com/t/control-panel-end-of...I’m still astonished when I can buy a T-shirt for the price of a cup of coffee. I remember when clothes and other stuff were really expensive (compared with wages). Before the rise of international manufacturing and trade, especially China.
I also remember the impact of constant inflation. It has taken decades for inflation expectations to subside. This is a key issue for the Federal Reserve since they will not cut the fed funds rate if consumer inflation expectations rise.
https://www.wsj.com/economy/the-era-of-cheap-stuff...The Era of Cheap Stuff Was Already Ending. Now Comes the Tariff Threat.
Goods prices are rising after decades of deflation, and Trump’s tariffs will give an added push
By Matt Grossman, The Wall Street Journal, March 30, 2025
President Trump’s tariffs threaten to amplify a big inflation challenge: Even before the new levies landed, a long run of everyday stuff getting cheaper was coming to a close…
Prices of core goods in the consumer-price index—that is, excluding food and fuel—fell 1.7% between December 2011 and December 2019. Over the same period, prices of core services like housing, healthcare and education rose 2.7% a year. The combined effect of rising service and falling goods prices was a core inflation rate of 2% a year overall…
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Not only are import prices no longer falling, Trump’s tariffs could make them more expensive. He has already imposed 25% steel and aluminum tariffs, an additional 20% tariff on China, plus 25% tariffs on most goods from Canada and Mexico that aren’t covered by a previous trade deal and a 25% tariff on all imported cars starting April 3. He has promised an even broader slew of new tariffs starting April 2, which he says are meant to restore fairness against other countries’ trade barriers…
A survey of 400 chief financial officers, released this past week by the Richmond Fed, the Atlanta Fed and Duke University, found that companies that don’t import from Canada, Mexico and China expect to raise prices 2.9% this year. But companies that rely heavily on these tariffed countries plan to raise prices 5.1%… By reducing competition, trade barriers allow domestic producers to raise prices more…[end quote]
I’m wondering if I should buy a new dishwasher the next time sales come around. DH says, reasonably, that our 1987 dishwasher is still working. But our range, refrigerator and microwave broke down and needed replacing. Should I act before inflation and get a new dishwasher?
The Cleveland Fed’s Inflation Nowcast is far above the Fed’s desired 2%.
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We also have to worry about a slowing economy. The Atlanta Fed’s GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2025 is -2.8 percent on March 28, down from -1.8 percent on March 26. The alternative model forecast, which adjusts for imports and exports of gold as described here, is -0.5 percent. After recent releases from the US Census Bureau and the US Bureau of Economic Analysis, the nowcast of the contribution of net exports to first-quarter real GDP growth declined from -3.95 percentage points to -4.79 percentage points in the standard model and from -1.92 percentage points to -2.53 percentage points in the alternative model.
The markets are responding negatively to the current situation. The Fear and Greed Index is in Extreme Fear. The trade is strongly risk-off as stocks and junk bonds are falling faster than the 10 year Treasury. Gold is rising to record levels.
The Treasury yield curve is showing an unusual signal. Over the past week or so the 2 year Treasury yield fell while the 20 year and longer were stable. This is a recessionary signal. The bond market does well in recessions since interest rates usually fall, increasing the value of existing bonds.
The stock market did poorly last week, especially the NAZ. The economy as a whole is moving toward recession.
The Cyclically Adjusted P/E Ratio is declining but still in bubble territory. The Chicago Fed’s National Financial Conditions Index (NFCI), which provides a comprehensive weekly update on U.S. financial conditions in money markets, debt and equity markets, and the traditional and “shadow” banking systems, is stable in the loose range so a financial crisis isn’t in the cards.
https://www.morningstar.com/portfolios/best-invest...The METAR for next week is rainy. I don’t see a fierce storm but a slow, relentless deterioration. At some point the bubble will collapse but it’s hard to predict exactly when.
Wendy
stockcharts.com
CandleGlance | Free Charts | StockCharts.com
Quickly and easily view and analyze mini-charts of up to 12 different symbols simultaneously, all displayed side-by-side on a single page
stockcharts.com
CandleGlance | Free Charts | StockCharts.com
Quickly and easily view and analyze mini-charts of up to 12 different symbols simultaneously, all displayed side-by-side on a single page
stockcharts.com
CandleGlance | Free Charts | StockCharts.com
Quickly and easily view and analyze mini-charts of up to 12 different symbols simultaneously, all displayed side-by-side on a single page
stockcharts.com
Dynamic Yield Curve | Free Charts | StockCharts.com
Visualize the relationship between interest rates and stocks over time using our draggable, interactive yield curve charting tool.
CNN
Fear and Greed Index - Investor Sentiment | CNN
CNN’s Fear & Greed Index is a way to gauge stock market movements and whether stocks are fairly priced. The index uses seven market indicators to help answer the question: What emotion is driving the market now?
chicagofed.org
National Financial Conditions Index: Current Data - Federal Reserve Bank of...
clevelandfed.org
Inflation Nowcasting
The Federal Reserve Bank of Cleveland provides daily “nowcasts” of inflation for two popular price indexes, the price index for personal consumption expenditures (PCE) and the Consumer Price Index (CPI). These nowcasts give a sense of where inflation...
atlantafed.org
GDPNow
Provides a
fred.stlouisfed.org
10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
Multpl
Shiller PE Ratio - Multpl
Shiller PE Ratio chart, historic, and current data. Current Shiller PE Ratio is 34.75, a change of -0.74 from previous market close.
