Guess ‘Who’ Just Figured Out The Fed Is Behind The Curve

I must admit, I had been expecting the Fed to be a little more hawkish over the past couple of months. Given how tone deaf they seemed during previous tightening periods when the US dollar was screaming higher and oil plunging to levels that would have resulted in entire states going bankrupt, today’s climate of rocketing risk assets and rising inflation seemed like a no brainer to err on the hawkish side. And I am not alone in this analysis. Recently Peter Broockvar, the Chief Market Analyst for the Lindsey Group published a great list titled ‘Why March Must be on the Table.’ Broockvar went through a variety of economic metrics to demonstrate how economic conditions have heated up over the past couple of months. (the note was from last week, so some of the data is a touch stale)
On inflation:
5 yr inflation breakeven: 12/14 was 1.83% vs 1.97% today 10 yr inflation breakeven: 12/14 was 1.97% vs 2.02% today Headline CPI: November CPI (the one they saw at December meeting) 1.7% vs 2.4% expected tomorrow for January Core CPI: November CPI 2.1% vs 2.1% expected tomorrow January Headline PCE: November 1.4% vs 1.6% for December Core PCE: November 1.7% vs 1.7% for December NY Fed survey of inflation expectations: November 2.5% vs 3% in January UoM one yr inflation expectations: November 2.4% vs 2.8% in February CRB index: 12/14 192 vs 192 today Journal of Commerce index: 12/14 104.5 vs 108.7 today On Jobs:
December/January monthly private sector job gains averaged 201k vs the previous 12 months average 176k Jobless claims 4 week average: mid December 264k vs 244k last week Average hourly earnings: November 2.7% y/o/y vs 2.5% in January Atlanta Fed wage tracker: November 3.8% vs 3.5% in December U6 unemployment rate: November 9.3% vs 9.4% in January NFIB Net compensation: November 21% vs 30% in January NFIB Net compensation future plans: November 15% vs 18% in January

This post was published at Zero Hedge on Feb 27, 2017.