GDP growth this quarter; Inflation Surprise Index low; Fed Chair's Message Is Clear: The Fight Against Inflation Isn't Over; Articles about China's struggles; My annual climbs for KIPP
1) Over the weekend I read a bunch of articles about the economy, inflation, and interest rates and came to the very firm conclusion that we are in an extremely unusual time and therefore anyone espousing very firm conclusions is full of you-know-what.
Take something simple like what U.S. GDP growth will be this quarter, which is already two-thirds over. As New York Times columnist Paul Krugman notes, estimates are all over the map: Wonking Out: Hitch Your Wagon to R-Star. Excerpt:
Is the economy slowing down, or is growth actually accelerating?
Based on the available data, you can believe whatever you want to believe. Take the red pill and you can go with the Atlanta Fed's GDPNow, a tracker that is currently estimating a crazy growth rate of 5.9%:
Take the blue pill and you can go with S&P Global's Purchasing Managers' Index, which shows the U.S. economy stalling:
I don't think I believe in either story, but who knows?
The Citi Economic Surprise Index indicates a big upside surprise:
2) Turning to inflation, Citi's Inflation Surprise Index shows that it will remain muted:
Despite this, Fed Chair Jerome Powell is saying hawkish things: Fed Chair's Message Is Clear: The Fight Against Inflation Isn't Over. Excerpt:
Jerome H. Powell, the chair of the Federal Reserve, pledged during a closely watched speech that his central bank would stick by its push to stamp out high inflation "until the job is done" and said that officials stood ready to raise interest rates further if needed.
Mr. Powell, who was speaking Friday at the Federal Reserve Bank of Kansas City's annual Jackson Hole conference in Wyoming, said that the Fed would "proceed carefully" as it decided whether to make further policy adjustments after a year and a half in which it had pushed interest rates up sharply.
But even as Mr. Powell emphasized that the Fed was trying to balance the risk of doing too much and hurting the economy more than is necessary against the risk of doing too little, he was careful not to take a victory lap around a recent slowing in inflation. His speech hammered home one main point: Officials want to see more progress to convince them that they are truly bringing price increases under control.
"The message is the same: It is the Fed's job to bring inflation down to our 2% goal, and we will do so," Mr. Powell said, comparing his speech to a stern set of remarks he delivered at last year's Jackson Hole gathering.
In tomorrow's e-mail, I'll address what I think the Fed should/will do...
3) There's a stark contrast between our robust economy and the problems China is facing. Here's a collection of articles I've recently sent to my China e-mail list (to join it, simply send a blank e-mail to: china-subscribe@mailer.kasecapital.com):
- Investors Fear a Financial Contagion in China (WSJ)
- China Sneezes, But Will the World Catch a Cold? (Bloomberg)
- What China's Economic Woes May Mean for the U.S. (NYT)
- How China Made Its Housing Crisis Worse (NYT)
- A Crisis of Confidence Is Gripping China's Economy (NYT)
- Get Ready for a Weaker Yuan (WSJ)
- He Fled China's Repression. But China's Long Arm Got Him in Another Country (NYT)
- Escape China by Jet Ski? A Dissident Is Said to Have Planned It for Years (NYT)
4) After being home for three days, I was getting stir crazy (tongue in cheek... sort of!), so yesterday I flew to Seattle, met my guide Paul, drove three hours to the Mount Baker ski area, and hiked four miles into Lake Ann, where we set up camp. Before the sun rose this morning, we started a 14-hour day during which we'll climb Mount Shuksan via the Fisher Chimneys.
Here's Paul and me at our campground at Lake Ann last night, with today's objective, Mount Shuksan, in the center behind us:
As you read this (I wrote it yesterday), we're probably halfway to the summit... so I'll share photos in tomorrow's e-mail. In the meantime, here are two photos of the climb that I pulled from the Internet:
Then, weather permitting (unfortunately the forecast is lousy), on Wednesday we're planning to climb the West Ridge of Forbidden, which is listed among the 50 Classic Climbs of North America, and finally Sharkfin Tower on Thursday. Fingers crossed that the rain holds off!
This is the eighth year in a row I'm climbing to raise money for my favorite charity, KIPP charter schools, to help thousands of KIPPsters on their even bigger climbs to and through college.
Serving on KIPP NYC's board for more than two decades, I've seen firsthand the transformative education the schools provide, so I'd be grateful if you'd help the 8,100 KIPPsters across 18 schools in NYC make it from kindergarten all the way through college. It's a challenge that has become immeasurably harder due to the pandemic and its aftermath, so they need our help more than ever.
Here I am wearing my KIPP shirt on the summit of my first peak, Mount Blanc, on the Fourth of July seven summers ago. I'll be wearing the same shirt this week!
If you'd like to support my climbs for KIPP, you can do so here.
Thank you!
Whitney
P.S. I welcome your feedback at WTDfeedback@empirefinancialresearch.com.