Sonu Varghese
More Good News for Rental Inflation
Carson Investment Research just released its 2023 outlook, which we titled “The Edge of Normal.” The big theme for 2022 was higher-than-expected inflation, which surged to the highest level since 1981. This resulted in the Federal Reserve embarking on its most aggressive rate hike cycle in 40 years, which led to an ugly 2022 for …
Sonu Varghese
January 20, 2023
Yes, Inflation is Headed Lower
After the October inflation report, I wrote that “one month does not make a trend.” After the November report, I wrote that we have the “making of a trend.” We now have a trend! Headline inflation fell 0.1% in December, the slowest pace since May 2020. Inflation has now decelerated to 6.5% year-over-year, quite a …
Sonu Varghese
January 13, 2023
Why is Everyone Predicting a Recession?
Almost every outlook you open this season has forecasters predicting that 2023 will see a recession. In contrast, we here on the Carson Investment Research Team believe the economy can avoid a recession this year. Note that the recession calls are all forecasts and clearly do not reflect where the economy is right now. For …
Sonu Varghese
January 11, 2023
The Labor Market Remains Strong
The December payroll report was yet another upside surprise as far as employment data go. Monthly payrolls rose by 223,000, above expectations for a 200,000 gain. The unemployment rate was expected to remain at 3.7% but fell to 3.5% – tying for the lowest rate since the 1950s. This is not remotely indicative of an …
Sonu Varghese
January 6, 2023
What You Need to Know About the Bank of Japan’s (Unexpected) Monetary Policy Change
The Bank of Japan (BOJ) made a surprise decision on Tuesday to widen the allowed trading band for 10-year Japanese government bonds (JGBs) from ~25 to ~50 basis points. This move signals a shift in the BOJ’s approach to monetary policy and inflation and is likely to be sustained by the incoming governor of the …
Sonu Varghese
December 23, 2022
The Monetary Policy Conversation is Going to Shift in 2023
First, the good news – The Federal Reserve raised the Federal Funds rate by 50 basis points (bps) to the 4.25-4.50% range – a step down from the 75 bps rate hike pace they went with at the last four meetings. This was expected, but it’s always good to see confirmation. They also said that …
Sonu Varghese
December 15, 2022
The Inflation Report We’ve Been Waiting For
Inflation has been top of investors’ minds this year, especially since it’s resulted in the most aggressive rate hike cycle in four decades. Since the beginning of the year, many people (including me) thought it would be simply a matter of time before inflation starts heading back to earth. But it was not to be. …
Sonu Varghese
December 14, 2022
More Good News on the Inflation Front: Falling Gas Prices ⛽️
Inflation has been on everyone’s mind this year, whether it’s households, investors, and the Federal Reserve. Surging inflation has weighed on consumer sentiment, though arguably, this is primarily because of gas prices. And as gas prices fell after the summer, consumer confidence started moving higher once again (I wrote about this back in September). We …
Sonu Varghese
December 9, 2022
Why the dollar matters 💵❓
A big story this year has been the US dollar, which has surged. The chart below shows the sharp rise of the ICE US dollar index, which measures changes in the US dollar against a basket of other currencies, including the euro, yen, British pound, and the Canadian dollar. However, it pulled back by just …
Sonu Varghese
December 7, 2022
Don’t Count This Economy Out
The big headline for the November payroll report was that 263,000 jobs were created last month, well above expectations for a gain of 200,000. Job growth has slowed since the beginning of the year, but make no mistake, this is still a very strong pace of job growth. As Fed Chair Jerome Powell noted in …
Sonu Varghese
December 2, 2022