Control Panel: More of the same

The Control Panel is showing that virtually every trend remains in place. This includes inflation which remains above the Federal Reserve’s 2% target.

Inflation Victory Is Proving Elusive, Challenging Central Banks and Markets

In the U.S. and Europe, underlying inflation has stopped falling or edged higher recently, weakening the case for rate cuts

By Tom Fairless, The Wall Street Journal, March 31, 2024

The “last mile” is proving tougher. Underlying inflation, which excludes volatile food and energy prices, slowed to 3% in the second half of last year across advanced economies but has since moved up to 3.5%, according to JP Morgan estimates.

That is forcing investors to rethink bets that inflation would steadily decline to central banks’ targets, generally around 2%. There are even concerns it could surge again, mirroring the second wave that characterized the high inflation of the 1970s…

The U.S.—but not Europe—is seeing big increases in productivity, that is output per worker, which helps to offset high wage growth. It is unclear, however, how long that will last… [end quote]

Fed Chair Says Central Bank Need Not ‘Hurry’ to Cut Rates

Jerome Powell said that strong economic growth gives Federal Reserve officials room to be patient, and he emphasized the institution’s political independence.
By Jeanna Smialek, The New York Times, March 29, 2024

Jerome H. Powell, the chair of the Federal Reserve, said on Friday that resilient economic growth is giving the central bank the flexibility to be patient before cutting interest rates…

Fed officials have recently struck a cautious tone, maintaining that they want greater confidence that inflation was under control. Mr. Powell reiterated that message on Friday.

“We can, and we will be, careful about this decision — because we can be,” Mr. Powell said, speaking in a question-and-answer session with the “Marketplace” host Kai Ryssdal in San Francisco. “The economy is strong: We see very strong growth.”… [end quote]

Inflation remains sticky and the economy is growing respectably with no recession in sight. The price of oil is rising, helping to drive inflation.

The markets are risk-on. The Fear & Greed Index is in Greed. The SPX and NAZ are trending higher although NAZ bullish percent is falling. VIX is low. The CAPE is still in a bubble, double-topping.

The 10-year Treasury yield has been gradually trending higher since the beginning of 2024 with oscillations. The Treasury yield curve is still inverted overall though there are some normal sections. The options market doesn’t expect the Fed to cut the fed funds rate before June.

There aren’t any news stories that will swing the markets.

The METAR for next week is sunny.



The central feature of recent inflation readings is shelter. Expect the newly built apartments to enter the marketplace this year and put a lot of downward pressure on rents. To free up the need to buy a house for many people.

Oil for now is only seasonal. I am more concerned with the Baltimore bridge collapse. I think that gets fixed in record time. Possibly two weeks to open up the lanes of sea traffic.

Apparently our cental bank didn’t get the memo:

The SNB reduced its headline interest rate by 0.25 percentage points to 1.5% on Thursday, making it the first central bank of a major western industrialised country to do so in the current cycle. In contrast, the US Federal Reserve and the European Central Bank (ECB) recently extended their interest rate pause.


Nah. They - SNB, EU CB, US Fed - did rock paper scissors and SNB “won”.