This is not a pipe. (It’s not a recession either.)

What is a recession? Could the “official” definition of a recession be any more subjective? Keep in mind that we are only in a recession when the National Bureau of Economic Research says so. This is the same organization that announced at the end of 2008 that we entered a recession a year earlier in Dec 2007. As we discussed last month, the widely used definition of a recession is…

The hits keep coming.

No easy answers for the Fed. Rates across the curve moved 10-15bps lower for the month, ending May with the 2T at 2.56% and the 10T at Equities continue to get hammered (7% down this month!), the Fed hiked rates 75bps (the single largest rate hike in over 25 years!), and headline inflation came in at 8.6% (highest in 40+ years!). Inflation is being driven by a myriad of factors:…

Inflation. Has it peaked?

Too soon to tell. Rates across the curve moved 10-15bps lower for the month, ending May with the 2T at 2.56% and the 10T at 2.85%. Inflation has moved slightly lower over the past couple of months, with Core PCE at 5.2% for March and 4.9% in April (year-over-year). While we are finally seeing a slight improvement in inflation, we will need further downward movement before confidently claiming we’re past…

Uncertainty abound, crystal ball is hazy.

Fed increase. As expected, the Fed increased the fed funds rate by 25bps to 0.25%-0.50% at its March meeting and revised its median forecast higher to 2.0% by year-end. But the updated dot plot showed a lack of conviction amongst committee members on where rates go from here, with individual forecasts ranging from 1.50%-3.25% (upper bound) by the end of 2022. Chairman Powell continues to say the Federal Open Market…