Goldilocks, Continued.

Last Week….

  • The Fed held interest rates steady but signaled potential future hikes, citing persistent inflation concerns.
  • Weekly jobless claims increased slightly, reflecting ongoing uncertainty in the labor market.
  • Major indices experienced fluctuations as investors reacted to mixed economic data and ongoing concerns over high interest rates.
  • Consumer confidence dipped as worries about inflation and high borrowing costs impacted spending sentiment.
  • Mortgage rates remained elevated, continuing to suppress home sales and new construction activity across the country.

Goldilocks

While a 0.5% rate cut by the Fed might indicate deteriorating financial conditions, last week’s data was a clear reminder that we have yet to see any worrisome signs for the US economy.

  • PCE Inflation (the Fed’s preferred measure) is now annualizing at 1.1%, 1.5%, 1.9%, and 2.2% for 1 month, 3 months, 6 months, and 12 months, respectively.
  • Services inflation remains stubbornly high at 3.3% over the last 12 months, but has recently trended downward.
  • Initial jobless claims came in below expectations and have been trending downward since early August.
  • Aggregate incomes (wages) have grown at an annualized pace of 4% over the last 3 months and 5.1% over the last 6 months, indicating that we have little to fear from an employment or household financial health perspective at this point in time.

Fig. 1: PCE Inflation

Source: Bloomberg, Mill Creek.

Disclosures & Important Information

Any views expressed above represent the opinions of Mill Creek Capital Advisers ("MCCA") and are not intended as a forecast or guarantee of future results. This information is for educational purposes only. It is not intended to provide, and should not be relied upon for, particular investment advice. This publication has been prepared by MCCA. The publication is provided for information purposes only. The information contained in this publication has been obtained from sources that

MCCA believes to be reliable, but MCCA does not represent or warrant that it is accurate or complete. The views in this publication are those of MCCA and are subject to change, and MCCA has no obligation to update its opinions or the information in this publication. While MCCA has obtained information believed to be reliable, MCCA, nor any of their respective officers, partners, or employees accepts any liability whatsoever for any direct or consequential loss arising from any use of this publication or its contents.

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