When I watched the FOMC press conference, Powell looked a little bit nervous to me. All he really said was that he’s “slowing” (basically ending) QT. What would happen if DOGE showed up at the Fed to execute an audit? How many “magic money machines” would they find? Now rinse-repeat in all of the major central banks around the world.
Consumer Economy
Retail Sales (RSXFSN); $551B -24.2B (-4.2% m/m)
Industrial Production (INDPRO); 104.2 +0.77 (+0.74% m/m)
Existing Home Sales (EXHOSLUSM495N); 257k units, +17K
Increasing Industrial Production is positive (+8.9% annualized), while Retail Sales (not seasonally adjusted – and not inflation-adjusted) hit a new 2-year low in February. You can see the seasonality (the post-Christmas slump Jan/Feb), but the new low is not a good sign, especially since this series is not adjusted for inflation.
Perhaps the migrants (and the big-time “beneficiaries” at the NGOs) are no longer able to buy goodies with USAID-dollars? Regardless – this is recessionary.
Lastly, units of Existing Home Sales (NSA) ticked higher, but they are rising off some pretty hideous lows. This is a series that the Fed “mysteriously” truncated back in 2024 (first historical tick in the Fed’s “updated” series: Feb 2024), and I had to get the previous bits from my archive. “No Context For You, little people.” ALT: Fed gonna Fed. Not exactly expansionary.
Credit & Rates
Fed Balance Sheet (WALCL); 6.756T -3.6B (-0.05% w/w)
Total Bank Credit (TOTBKCR); 18.094T +4.9B, (+0.03% w/w)
30 Year Mortgage Rate (MORTGAGE30US); 6.67% +2 bp
10 Year Treasury (DGS10); 4.25% -6 bp
20+ Treasury Fund (TLT); +0.53 +0.59%
Bank credit inched higher (1.56% annualized) – where “enough” is about 5% – that’s deflationary. There were some modest inflows into the Treasury market, especially in the middle part of the yield curve (5y-10y) which did best, at around -5/-6 bp, which caused TLT to move up by 0.59%. Falling yields = rising bond prices.
The Fed had its meeting this week; no cuts, but the Fedsters decided to stop QT – except for a “token” 5 billion QT per month, which should get us back to “pre-pandemic” levels by mid-2036.
by thatchmo 
