Consumer Economy
- Median New Home Sales Price (MSPNHSUS) 392.3K -13.5K (-3.33% m/m) (prior -3.38% m/m)
- Retail Sales (RSAFS) 735.9B +4.5B (+0.61% m/m) (prior -0.11% m/m)
- Industrial Production (INDPRO) 102.3 +0.37 (+0.37% m/m) (prior +0.43% m/m)
- Producer Prices (PPIACO) 261.6 +0.87 (+0.33% m/m) (prior -0.51% m/m) +8.13 [+3.21%] y/y
- Existing Home Sales (EXHOSLUSM495S) 4.35M +210.0K (+5.07% m/m) (prior +0.73% m/m)
- CPI All Urban (CPIAUCSL) +0.31% m/m (prior +0.20% m/m)
There were lots of catch-up reports this week: October, November, and a few from December.
New Home Prices [in October] fell, while months-of-supply and new home sales were mostly unchanged. Unfortunately, cheaper homes didn’t lead to more sales.
Retail Sales [in November] rose. Is it keeping up with inflation? Maybe not quite – at 7% annualized. Vehicles and Clothing sales did well (about +0.8% m/m), but Food & Bev rose just 0.05%. No restaurants for the little people, it seems.
Industrial Production [in December] moved higher (4.4% annualized); it has been a slow, steady increase under Trump.
PPI [in November] moved slowly higher – just 3% annualized. Low energy prices contributed, I suspect.
CPI [in December] allegedly moved up 3.7% annualized. What happened to the Fed’s “2% inflation” target? I guess that was the Old Normal. Maybe the 3.7% inflation is closer to a 10% actual. Is it the New Normal?
Credit & Rates
- Total Bank Credit (TOTBKCR) 18.99T +50.2B (+0.27% w/w) (prior -0.11% w/w)
- Fed Balance Sheet (WALCL) 6.58T +8.1B (+0.12% w/w) (prior -1.01% w/w)
- US 30 Year Mortgage Rate (MORTGAGE30US) 6.06% -10 bp
- 3-Month Treasury (DGS3MO) 3.65% +3 bp
- 1-Year Treasury (DGS1) 3.55% +3 bp
- 10-Year Treasury (DGS10) 4.21% +3 bp
- 20+ Treasury ETF (TLT) -0.15% w/w (prior +1.03% w/w)
We saw a BOOMING bank credit expansion (14% annualized) this week. It is hard to know the trend right now, but the new all-time high keeps us in bank-credit expansion territory. That means no deflation.
There was a tiny bit of money printing at the Fed – we remain well below December levels.
Short-term rates moved higher, but long-dated rates were mostly flat; TLT wasn’t hit very hard by the increase. My guess: short-dated bonds didn’t really like the CPI report. I use the rate map to sort out “rate cut odds”
by cmartenson 
