Weekly Signal & Noise Filter

The Delicate Sound of Thunder

At present, markets are in a state of stable equilibrium, supported by a benign information surface around the broader economy, the labor market, and the Fed’s monetary stance.

Friday morning’s core PCE release for Augusts not only confirms as much but also reinforces the point.  Pinebrook’s previous projected annualized numbers were in part impacted by the prior prints. 

These prior prints have been revised, and the new inflationary data set for the 2024 calendar year looks like this.

The revisions assign higher inflation results to the early part of the calendar year and make the calendar YTD disinflationary trip more pronounced. 

• On Thursday, there was an expected small month-over-month uptick in inflation, suggesting disinflation had slowed.

• On Friday we got a 13-basis point month-over-month decline in inflation.

• Thursday, the YTD disinflationary journey in the YoY metric was from 2.94% to a projected 2.69%, for a fall of 25-basis points.

• Friday, that journey went from 3.12% to 2.68%, for a YTD fall of 43-basis points. 

The disinflationary information surface continues to evolve downward at a faster clip.