Inflation declined in November, according to the Consumer Price Index, but prices remain high. Still worried about inflation, the Fed remains hawkish about pushing rates higher early in 2023 after increasing rates by 50 basis points last week following four straight 75-BPs increases. Auto loan performance deteriorated further in November. The default rate in November … Continued

As expected, the Fed raised the target for the Federal Funds Rate by half a percentage point today, which was a smaller increase than the four straight jumbo increases that preceded the latest move. The Fed’s biggest news was that the terminal rate, meaning the ultimate peak in rates for this tightening cycle, will be … Continued

Consumer credit growth accelerated in October as revolving credit increased but non-revolving credit declined. Auto loan credit access tightened sharply in November across all channels and across all lender types as every factor moved against consumers. Used-vehicle sales likely declined in November, and wholesale used-vehicle prices declined again. The Manheim Used Vehicle Value Index is … Continued

Financial markets have taken another ride on the Wishful Thinking About Fed Policy roller coaster over the last week. Fed Chair Jerome Powell sent the invitation to come on board with a speech he gave last Wednesday, the final day of November, at the Brookings Institute. The speech gave markets what they wanted to hear. … Continued

Job growth in November did not slow as much as expected or as desired by the Fed. The unemployment rate was steady at 3.7%, and wage growth accelerated. Jobless claims increased throughout November. Continuing claims have risen from historic lows but are at the highest levels in 38 weeks. Consumer spending growth accelerated in November … Continued

The release of new data was limited last week due to the Thanksgiving holiday. What news there was represented a mixed bag. New home sales were stronger than expected. Jobless claims increased. Consumer sentiment showed mixed views. The Fed released not surprising notes from its November meeting. New Home Sales and Inventory Deliver Surprising Increases … Continued

Retail sales growth accelerated in October and was stronger than expected. Adjusted for inflation, retail sales were up slightly from a year ago. Residential construction slowed again in October, with single-family activity driving much of the decline. Existing home sales declined in October for the ninth straight month. Initial jobless claims declined in the latest … Continued

Financial markets shifted to the positive last week, with weaker-than-expected inflation data pointing to an eventual end to rate increases. However, the Fed will likely raise rates by 50 basis points (BPs) in December as planned unless something more dramatic changes between now and December 14. We get November employment and Consumer Price Index (CPI) … Continued

The October employment report saw a modest slowing in job creation, along with a slight increase in the unemployment rate and a modest slowing in wage growth. Still, the labor market remains strong and is a key reason why the Fed believes it is too soon to pause on rate increases. The Fed increased the … Continued

As expected, the Fed raised the target for the Federal Funds Rate by three-quarters of a percentage point today, which was the fourth straight jumbo increase this year. The biggest news from the Fed’s move was the indication that future increases may be smaller and slower to come. The Fed has now moved the target … Continued