US Treasuries
- Thursday’s UST 10y range: 4.51% – 4.59%, closing at 4.57%
Jim Bianco joins Bloomberg to recap yesterday’s FOMC Meeting & give his outlook for 2025
Upcoming US Treasury Supply
Tentative Schedule of Treasury Buyback Operations
From our Arbor Data Science Desk: The Rising Cost of Healthcare in the U.S.
The Wall Street Journal: Why Are Americans Paying So Much More for Healthcare Than They Used to?
U.S. healthcare spending rose 7.5% to nearly $5 trillion last year, according to new government data. Worker shortages, hospital consolidation are among the reasons why.
Intraday Commentary from Jim Bianco
An astonishing passage from the Powell Presser:
POWELL: You had two months of higher inflation, September and October. As I mentioned, November is back on track. But, you know, once again we’ve, you know, we’ve had a year end projection for inflation. And it’s kind of fallen apart as we’ve approached the end of the year.
—
What did Powell mean by saying that their inflation projections “kind of fell apart?”
See the red box in the graphic below for their inflation expectations.
They raised their 2025 and 2026 inflation forecasts from their September update. The Fed now expects more inflation than they thought in September, and inflation will not return to 2% until 2027, six years after Powell said the inflation rise was “transitory.”
So, why exactly did the Fed cut rates yesterday and pencil in two more cuts for 2025????
He said core inflation was nearly 6% in 2022, so anything that is not close to 6% is a win—even if that “win” is well above their 2% target and has been rising for two years.
No one is buying this rationalization. See this three-day tick chart of 10-year yields.
In Other News…
Axios: Don’t blame inflation for the price of new cars
Americans are paying more for new cars mainly because they’re trading up in size. The average price paid for a new car at the beginning of 2014 was $32,250. By November 2024, that had risen by $16,500 — or 51% — to $48,750.
CNBC: These are the top 10 – housing hot spots’ for 2025 – none are in Florida
Four out of the NAR’s 10 “hot spots” are located in the South — although unlike those on other lists, none are in Florida. Three of the list’s hot spots are in the Midwest.
NPR: Bird flu updated: California declares emergency and U.S. sees 1st severe human case
California Gov. Gavin Newsom has declared a state of emergency in response to the ongoing spread of bird flu among dairy cattle. More than 300 dairy herds have tested positive in California in the last 30 days alone.
Arbor Data Science:
FoxBusiness: Teamsters union launches historic nationwide strike against Amazon: ‘Paying the price’
Thousands of Amazon workers organized under the Teamsters union went on strike at 6 a.m. Thursday after the company’s “repeated refusal to follow the law and bargain.”
Upcoming Economic Releases & Fed Speak
- 12/20/2024 at 7:30am EST: Fed’s Daly Appears on Bloomberg TV
- 12/20/2024 at 8:30am EST: Williams Appears on CNBC
- 12/20/2024 at 8:30am EST: Personal Income & Personal Spending & Real Personal Spending
- 12/20/2024 at 8:30am EST: PCE Price Index MoM & PCE Price Index YoY
- 12/20/2024 at 8:30am EST: Core PCE Price Index MoM & Core PCE Price Index YoY
- 12/20/2024 at 10:00am EST: U. of Mich. Sentiment & U. of Mich. Current Conditions & U. of Mich. Expectations
- 12/20/2024 at 10:00am EST: U. of Mich. 1-Yr Inflation & U. of Mich. 5-10 Inflation
- 12/20/2024 at 10:00am EST: Kansas City Fed Services Activity
- 12/23/2024 at 8:30am EST: Chicago Fed Nat Activity Index
- 12/23/2024 at 10:00am EST: Conf. Board Consumer Confidence/ Present Situation / Expectations
- 12/24/2024 at 8:00am EST: Building Permits & Building Permits MoM
- 12/24/2024 at 8:30am EST: Philadelphia Fed Non-Manufacturing & Durable Goods Orders & Durables ex Transportation
- 12/24/2024 at 8:30am EST: Cap Goods Orders Nondef Ex Air & Cap Goods Ship Nondef Ex Air
- 12/24/2024 at 10:00am EST: New Home Sales & New Home Sales MoM
- 12/24/2024 at 10:00am EST: Richmond Fed Manufact. Index & Richmond Fed Business Conditions
- 12/26/2024 at 8:30am EST: Initial Jobless Claims & Continuing Claims