QUICK QUILL — ‘Current’ measures from regional Fed surveys give credence to the emerging disinflationary narrative on both the employment and pricing power fronts. Alongside U.S. households’ inflation expectations dropping to pre-pandemic levels in Conference Board data, a further rise in long-end yields would be inconsistent with multiple downward price pressures.
TAKEAWAYS
- The correlation between Conference Board Expectations for Lower Interest Rates and Higher Stock Prices was a record +0.84 from 2021-2024, one with no precedents; in data back to 1990, the four-year correlation has been negative a resounding 77% of the time
- Dallas Fed Texas Retail Selling Prices have been negative in four of the last eight months, flagging further core PCE cooling; similarly, Philly Fed Non-Mfg Prices Received collapsed from 24.6 in October to 0.5 in November, the second-largest MoM drop in 14 years of data
- Richmond Fed Services Employment has been in the red for four of the last five months, flagging downside risk for nationwide non-Mfg payrolls; meanwhile, Conference Board Vacation Intentions slipping to a 13-year low does not bode well for leisure sector job growth