December 16, 2021 Headlines

Markets continue to digest yesterday’s FOMC meeting as well as a somewhat unexpected rate hike by the Bank of England this morning. Treasuries are mixed, with short/intermediate yields slightly lower on the day and long-end yields slightly higher. The FOMC executed yesterday on what has been a very sharp and swift reversal on their inflation outlook. The “transitory” description has been ditched, and the median participant forecast (the “dots”) now shows three rate hikes in 2022, right in line with what the market has been pricing in for several weeks (hence why front-end yields haven’t risen sharply in response to the shift). As expected, the FOMC also announced a doubling of its monthly tapering pace to $30 billion, which should have the tapering process over in March. The early tapering schedule would theoretically make the March 2022 meeting live for a rate hike if necessary, but the general expectation at this point is that liftoff would occur in June followed by quarterly hikes in September and December.

Jason Haley
Chief Investment Officer

12/14/2021NFIB Small Business Optimism98.498.498.2
12/14/2021PPI Final Demand MoM0.50%0.80%0.60%
12/14/2021PPI Ex Food and Energy MoM0.40%0.70%0.40%
12/14/2021PPI Ex Food, Energy, Trade MoM0.40%0.70%0.40%
12/14/2021PPI Final Demand YoY9.20%9.60%8.60%8.80%
12/14/2021PPI Ex Food and Energy YoY7.20%7.70%6.80%7.00%
12/14/2021PPI Ex Food, Energy, Trade YoY6.90%6.20%6.30%
12/15/2021MBA Mortgage Applications-4.00%2.00%
12/15/2021Empire Manufacturing2531.930.9
12/15/2021Retail Sales Advance MoM0.80%0.30%1.70%1.80%
12/15/2021Retail Sales Ex Auto MoM0.90%0.30%1.70%1.80%
12/15/2021Retail Sales Ex Auto and Gas0.80%0.20%1.40%1.60%
12/15/2021Retail Sales Control Group0.70%-0.10%1.60%1.80%
12/15/2021Import Price Index MoM0.60%0.70%1.20%1.50%
12/15/2021Import Price Index ex Petroleum MoM0.40%0.70%0.50%0.60%
12/15/2021Import Price Index YoY11.40%11.70%10.70%11.00%
12/15/2021Export Price Index MoM0.50%1.00%1.50%1.60%
12/15/2021Export Price Index YoY18.20%18.00%
12/15/2021Business Inventories1.10%1.20%0.70%0.80%
12/15/2021NAHB Housing Market Index848483
12/15/2021FOMC Rate Decision (Lower Bound)0.00%0.00%0.00%
12/15/2021FOMC Rate Decision (Upper Bound)0.25%0.25%0.25%
12/15/2021Interest on Reserve Balances Rate0.15%0.15%0.15%
12/15/2021Total Net TIC Flows$143.0b-$26.8b-$27.3b
12/15/2021Net Long-term TIC Flows$7.1b$26.3b$26.7b
12/16/2021Initial Jobless Claims200k206k184k188k
12/16/2021Continuing Claims1943k1845k1992k1999k
12/16/2021Housing Starts1567k1679k1520k1502k
12/16/2021Building Permits1661k1712k1650k1653k
12/16/2021Housing Starts MoM3.10%11.80%-0.70%-3.10%
12/16/2021Building Permits MoM0.50%3.60%4.00%4.20%
12/16/2021Philadelphia Fed Business Outlook29.115.439
12/16/2021Industrial Production MoM0.60%1.60%
12/16/2021Capacity Utilization76.80%76.40%
12/16/2021Manufacturing (SIC) Production0.70%1.20%
12/16/2021Langer Consumer Comfort51
12/16/2021Markit US Manufacturing PMI58.558.3
12/16/2021Markit US Composite PMI57.2
12/16/2021Markit US Services PMI58.858
12/16/2021Kansas City Fed Manf. Activity2524
12/17/2021Bloomberg Dec. United States Economic Survey


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