January 10, 2022 Headlines

Markets continue to adjust to the expectation of an accelerated Fed exit that could include balance sheet reduction in the second half of the year. U.S. equity futures are down 35-125 basis points (bps) ahead of the open, and Treasury yields 1-2 bps lower in the belly of the curve. Pricing in fed funds futures and swap markets now imply close to 4 rate hikes in 2022, with liftoff coming at the March meeting. It’s been a sharp swing in expectations since last August, when no rate hikes were expected in 2022, and the 5-year Treasury yield was approximately 85 bps lower than today’s level. The focus for this week will be the December CPI report on Wednesday, which caps off a week of three important releases (12/15 FOMC minutes and December jobs report). The first two reinforced hawkish expectations for Fed policy in 2022 and fueled a 15 bps increase in intermediate Treasury yields. Several Fed leaders will also be speaking this week, but the list doesn’t include Fed Chair Powell.

Jason Haley
Chief Investment Officer

01/10/22Wholesale Inventories MoM1.20%1.20%
01/10/22Wholesale Trade Sales MoM2.20%
01/11/22NFIB Small Business Optimism98.598.4
01/12/22MBA Mortgage Applications-5.60%
01/12/22Real Avg Hourly Earning YoY-1.90%-1.70%
01/12/22CPI MoM0.40%0.80%
01/12/22CPI Ex Food and Energy MoM0.50%0.50%
01/12/22CPI YoY7.00%6.80%
01/12/22CPI Ex Food and Energy YoY5.40%4.90%
01/12/22CPI Index NSA278.776277.948
01/12/22CPI Core Index SA284.679283.201
01/12/22Real Avg Weekly Earnings YoY-1.90%
01/12/22Monthly Budget Statement-$2.5b-$191.3b
01/12/22U.S. Federal Reserve Releases Beige Book
01/13/22PPI Final Demand MoM0.40%0.80%
01/13/22PPI Ex Food and Energy MoM0.50%0.70%
01/13/22PPI Ex Food, Energy, Trade MoM0.40%0.70%
01/13/22PPI Final Demand YoY9.80%9.60%
01/13/22PPI Ex Food and Energy YoY8.00%7.70%
01/13/22PPI Ex Food, Energy, Trade YoY6.90%6.90%
01/13/22Initial Jobless Claims200k207k
01/13/22Continuing Claims1760k1754k
01/14/22Retail Sales Advance MoM-0.10%0.30%
01/14/22Retail Sales Ex Auto MoM0.20%0.30%
01/14/22Retail Sales Ex Auto and Gas-0.10%0.20%
01/14/22Retail Sales Control Group0.10%-0.10%
01/14/22Import Price Index MoM0.20%0.70%
01/14/22Import Price Index ex Petroleum MoM0.60%0.70%
01/14/22Import Price Index YoY10.80%11.70%
01/14/22Export Price Index MoM0.30%1.00%
01/14/22Export Price Index YoY18.20%
01/14/22Bloomberg Jan. United States Economic Survey
01/14/22Industrial Production MoM0.20%0.50%
01/14/22Capacity Utilization77.00%76.80%
01/14/22Manufacturing (SIC) Production0.40%0.70%
01/14/22Business Inventories1.20%1.20%
01/14/22U. of Mich. Sentiment7070.6
01/14/22U. of Mich. Current Conditions73.874.2
01/14/22U. of Mich. Expectations6768.3
01/14/22U. of Mich. 1 Yr Inflation4.80%4.80%
01/14/22U. of Mich. 5-10 Yr Inflation2.90%


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