Consumer Economy
Existing Home Sales (EXHOSLUSM495S); 4.06M +60K (+1.48% m/m)
CPI All Urban (CPIAUCSL); +0.31% m/m (prior +0.38% m/m)
The CPI release [originally due out Oct 15] came in at 3.72% annualized. The release (at 08:30 Eastern on Friday) definitely moved prices around. Mockingbird Media took notice. Pre-midterms, who is to blame, I wonder?
Inflation hit 3% in September, reflecting stubborn price pressures on U.S. consumers [Oct 24]
September CPI data was originally scheduled to be released Oct. 15. The government ultimately decided to issue the report since the numbers are needed to determine the cost-of-living adjustment for Social Security recipients next year.
(source – NBC)
I’m old enough to remember when “Biden” (Zients/Klain-Autopen) got us to BLS-reported 8% inflation, which is probably understated by the usual 7%. Currently, CPI is moving higher, and actual inflation is probably around the 10% (annualized) level. If only we had stopped the “magic money machines” that Elon discovered.
The number of existing home sales inched higher, but remains near 8-year lows. Can anyone afford a home?
Not unobtainium, but probably unaffordium.
Credit & Rates
Fed Balance Sheet (WALCL) 6.59T -6.9B (-0.11% w/w)
Total Bank Credit (TOTBKCR) 18.80T +38.9B (+0.21% w/w); 10.92% annualized
30 Year Mortgage Rate (MORTGAGE30US) 6.19% -8 bp
3-Month Treasury (DGS3MO) 3.87% -13 bp
10-Year Treasury (DGS10) 4.00% -2.0 bp
20+ Year Bond (TLT) 91.47 +0.30%
There was some modest QT (which will be stopping soon), alongside a YUGE increase in bank credit, which is expansionary.
Money flowed into bonds, but mostly just the short end of the curve. After falling during the week, the 10-year rate actually increased 4 bp ahead of the CPI release; that limited the gains in TLT. The 10-year yield remains in a reasonably strong downtrend. That’s good if you own TLT.
CME Fedwatch Tool projects a 98% chance of one cut on the Oct 29th meeting, in spite of the Bad CPI report.
by barbarah 
