Boockvar: Why March Must Be On The Table

Is a rate hike “on the table” for the FOMC’s March meeting? Peter Boockvar shows us the data that surely any data-dependent Fedhead must be looking at.

Some acceleration here since the last meeting with a press conference in December (the Fed prefers to use FOMC days with pressers as their “live” meetings)…

On inflation:

5 yr inflation breakeven: 12/14 was 1.83% vs 1.97% today

10 yr inflation breakeven: 12/14 was 1.97% vs 2.02% today

Headline CPI: November CPI (the one they saw at December meeting) 1.7% vs 2.4% expected tomorrow for January

Core CPI: November CPI 2.1% vs 2.1% expected tomorrow January

Headline PCE: November 1.4% vs 1.6% for December

Core PCE: November 1.7% vs 1.7% for December

NY Fed survey of inflation expectations: November 2.5% vs 3% in January

UoM one yr inflation expectations: November 2.4% vs 2.8% in February

CRB index: 12/14 192 vs 192 today

Journal of Commerce index: 12/14 104.5 vs 108.7 today

On Jobs:

December/January monthly private sector job gains averaged 201k vs the previous 12 months average 176k

Jobless claims 4 week average: mid December 264k vs 244k last week

Average hourly earnings: November 2.7% y/o/y vs 2.5% in January

Atlanta Fed wage tracker: November 3.8% vs 3.5% in December

U6 unemployment rate: November 9.3% vs 9.4% in January

NFIB Net compensation: November 21% vs 30% in January

NFIB Net compensation future plans: November 15% vs 18% in January

Markets:

Since 12/13 (day before FOMC) S&P 500 up 2.5% to record high and up 9% since election (No uncertainty here)

10 yr yield on 12/13 2.47% vs 2.44% today and vs 1.85% on day of election

2 yr yield on 12/13 1.17% vs 1.21% today and vs .85% on day of election

Josh here – hard to ignore.

Source:

Peter Boockvar
Managing Director, Chief Market Analyst
The Lindsey Group LLC