Food Inflation Tailrisks

Food prices are correlated with EM inflation surprises. The current surge in soft grain prices should be monitored in case it spills over into general inflation expectations Food inflation can have outsized impacts on inflation expectations due to the higher frequency...

Plenty of Cover for Fed to Maintain the “Big Ease”

In our Market Ledger, one of the “debits” for the market is chronic insolvency. We have not really begun to see the full impact on jobs and businesses due to improved unemployment benefits, stimulus cheques and business lending schemes, but that will change as...

US Consumer Will not be Coming to the Economy’s Rescue

The latest print from the University of Michigan consumer sentiment survey has shown a fall of almost 12 points, the largest drop since 2008, and takes us back to 2016 levels. Unlike the last three recessions, which had seen consumer sentiment fall into each one...

Narrative Shift Depends on Virus

Earlier this month, the S&P and gold both collapsed on the same trading day, which is extremely rare. The top-left chart shows that in the past 20 years, the only times gold was down more than 3% while the S&P is down more than 5% was last week and back in...