Still no white smoke over First Republic and CPI
I had been hoping to cover what looks set to be the second-biggest bank failure in US history,
US Inflation
Most important, arguably, is the Personal Consumption Expenditure (PCE) deflator, compiled as part of the gross domestic product calculations. It takes a while to compute, which is why it comes out four weeks in arrears, but the Fed takes it more seriously than other inflation metrics.
For a purists’ approach, the Dallas Fed publishes a “trimmed mean” PCE, in which the biggest outlying components in either direction are excluded and an average taken of the rest. This leaves out extremes such as the surge in used-car prices in 2021, and gives what should be a good measure of core underlying inflation pressures.
It suggests that inflation has stopped increasing, but also that the decline has barely started
John Authers Bloomberg 1 maj 2023
First Republic It’s small enough to fail, and the risk already looks priced in
John Authers Bloomberg 28 april 2023
https://englundmacro.blogspot.com/2023/04/first-republic-its-small-enough-to-fail.html
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