Eurodollar University

The data continues to pour in showing US consumers have indeed hit the wall. Spending is down according to a variety of sources, including the latest update on retail sales for May. There is also a growing body of evidence indicating there is more weakness to come starting with summer vacations. All this indicates the chances of full-blown recession are rising sharply. Eurodollar University's Money & Macro AnalysisCNN  Evidence is mounting that the American shopper is cutting backhttps://edition.cnn.com/2024/06/18/economy/us-retail-sales-may/index.htmlMcKinsey & Company An update on US consumer sentiment: Are consumers on the cusp of a shift?https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/the-state-of-the-us-consumerDeloitte Summer Travel Survey 2024https://www2.deloitte.com/content/dam/insights/articles/us187281_cic_summer-travel/DI_2024-summer-travel.pdfFederal Reserve Beige Book May 29, 2024https://www.federalreserve.gov/monetarypolicy/files/BeigeBook_20240529.pdfhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDUEurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.Sign up below:https://event.webinarjam.com/channel/rates

Consumer confidence has dropped sharply over the past few months as Americans are now more concerned about jobs and incomes than prices. The shift has been so pronounced that even members of the mainstream media are questioning FOMC officials. Hardly strong and resilient, there's rising unemployment and declining confidence mixed with a bevy corporate warnings.Eurodollar University's conversation w/Steve Van MetreFRB Chair Jay Powell Press Conference June 12, 2024https://www.youtube.com/watch?v=YqaxWf7gsQATranscript:https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20240612.pdfhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDUEurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.Sign up below:https://event.webinarjam.com/channel/rates

Housing prices in China plunged in May, accelerating sharply after April's big drop indicating the situation in the real estate market is getting closer to becoming disorderly. There will be fallout across the world should that happen, as there already is across China's economy as the latest data also showed. Eurodollar University's Money & Macro AnalysisBloomberg China Real Estate, Production Slide Highlights More Stimulus Neededhttps://www.bloomberg.com/news/newsletters/2024-06-17/world-economy-latest-china-property-sector-plunge-needs-more-supportChina's NBS Situation in Real Estatehttps://www.stats.gov.cn/sj/zxfb/202406/t20240617_1954711.htmlBloomberg China Steps Up Warning on Relentless Bond-Buying Frenzyhttps://www.bloomberg.com/news/articles/2024-06-17/china-steps-up-warnings-on-relentless-bond-buying-frenzyhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDUEurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.Sign up below:https://event.webinarjam.com/channel/rates

Conventional 'wisdom' says that when US$ interest rates go down the dollar goes down with them. Yet, it hasn't been uncommon to find Treasury yields falling as the dollar's exchange value jumps. When that has happened, nothing good comes from it. We're starting to see what looks to be that scenario setting up right now. Eurodollar University's Money & Macro Analysishttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDUEurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.Sign up below:https://event.webinarjam.com/channel/rates

Eurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.Sign up below:https://event.webinarjam.com/channel/ratesI said the payroll number is wrong and Jay Powell of all people agrees. But if the real question is how wrong, that's where the debate is even though it should already be settled. There is plenty of evidence the US is tilting in the direction of the HH Survey and unemployment rate. And that includes the rates market which ignored the FOMC's hawkish dots. Eurodollar University's Money & Macro AnalysisJay Powell's Press Conferencehttps://www.youtube.com/watch?v=q3ZE5tF_IMUCNBC Quotes from Jay Powell Press Conferencehttps://www.cnbc.com/2024/06/12/fed-meeting-today-live-updates-on-june-fed-rate-decision.htmlPolitico Biden’s economy: Good metrics, bad vibes, few levershttps://www.politico.com/news/2024/06/07/biden-has-an-economic-story-to-tell-and-yet-00162338Guardian Majority of Americans wrongly believe US is in recession – and most blame Bidenhttps://www.theguardian.com/us-news/article/2024/may/22/poll-economy-recession-bidenBLS Business Employment Dynamics Summaryhttps://www.bls.gov/news.release/cewbd.nr0.htmTable 4'https://www.bls.gov/news.release/cewbd.t04.htmhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Eurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.Sign up below:https://event.webinarjam.com/channel/ratesWalgreens is the latest Big Name to cut prices because Americans have run out of money. As the company's prices go down, those will add even more to the disinflationary environment; and that's the bad side of smaller price changes. Today's May CPI completely backs up everything we've been seeing. Eurodollar University's Money & Macro AnalysisWalgreens Walgreens Introduces Summer of Savingshttps://www.walgreensbootsalliance.com/news-media/press-releases/2024/walgreens-introduces-summer-savingsQuartz Amazon, Walmart, and Big Retail’s race to cut priceshttps://qz.com/target-walmart-amazon-walgreens-price-cuts-consumers-1851507920Bloomberg  Big Oil’s Blockbuster $114 Billion Investor Payout Is Most Everhttps://www.bloomberg.com/news/articles/2024-02-07/big-oil-pays-out-record-114-billion-in-share-buybacks-and-dividendshttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Last week's ECB rate cut was...odd. Sure, officials had said for months they were going to do it. Yet, the conditions that would have to be met were not. Policymakers went ahead anyway and this past weekend's developments are a big Big Picture reason why. Eurodollar University's Money & Macro AnalysisBloomberg Italy’s Tajani Calls for Quick Second ECB Cut After June Movehttps://www.bloomberg.com/news/articles/2024-06-05/italy-s-tajani-calls-for-quick-second-ecb-cut-after-june-moveThe Times Back me for low interest rates, Rishi Sunak tells votershttps://www.thetimes.com/uk/politics/article/rishi-sunak-tories-interest-rates-general-election-962mpcmjxAP UK inflation lowest in 3 years. Prime Minister Sunak makes it a focus in election call for July 4https://apnews.com/article/britain-economy-inflation-interest-rates-090db19af939b9c532da1fb15ab40a0aLeMonde Moody's warns that France's snap election could lower credit ratinghttps://www.lemonde.fr/en/france/article/2024/06/11/moody-s-warns-that-french-snap-election-could-lower-credit-rating_6674498_7.html#https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Eurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.Sign up below:https://event.webinarjam.com/channel/ratesConsumer credit has historically been a solid recession signal, particularly how consumers alter their usage of credit cards. Some of that by choice, for many it is the bank's. Either way, when this happens it is more compelling evidence backing the rise in the unemployment rate.Eurodollar University's Money & Macro AnalysisSeptember 2008 FOMC Transcripthttps://www.federalreserve.gov/monetarypolicy/files/FOMC20080916meeting.pdfMarch 2001 FOMC Transcripthttps://www.federalreserve.gov/monetarypolicy/files/FOMC20010320meeting.pdfhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Roaring Kitty is not the problem, nor is Gamestop the company and its stock. All are symptoms of a degraded model that increasingly rewards all the wrong behaviors. Stocks have become lottery tickets, the pie-in-the-sky way out for way too many Americans otherwise trapped in a real economy that continues to leave them behind - as the latest employment report proves. Eurodollar University's conversation w/Steve Van MetreRoaring Kitty Livestream 6/7/2024https://www.youtube.com/watch?v=U1prSyyIco0&t=658sThe Hill GameStop shares plunge, halted during Roaring Kitty livestreamhttps://thehill.com/business/4710147-gamestop-shares-trading-roaring-kitty-livestream-meme-stock/https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

This has never happened before. Sure, the payroll data and CPS series have diverged before but this is something entirely new. The fact that it runs contrary to decades of history makes our determination rather easy and simple: the labor market noose is tightening. Eurodollar University's Money & Macro AnalysisBloomberg Big US Job Gains Is Out of Sync With Recent Weaker Economic Datahttps://www.bloomberg.com/news/live-blog/2024-06-07/us-employment-report-for-mayhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU