JULY 12, 2024 – The June report came in at 3.0%, below the consensus estimate of 3.4%. I didn’t expect quite so low. But, was not surprised. The 3-month annualized inflation rate is 2.4%. The 6-month annualized inflation rate is 4.9%. These figures bracket the annualized rate (3.0%) and thus indicate the annual CPI should remain in this area for awhile. The data is predicting a reading between 3.0% and 3.2% next month. I think 2.8%-2.9% is likely. The market is expecting one rate reduction from the Fed – maybe in September or December. There is a very slim, but increasing, chance of a rate reduction at the upcoming July meeting. I have also seen a forecast of up to 8 reductions by next Summer. That seems extreme to me. But, if the unemployment rate goes up to 4.4%-4.5% and the CPI can stay below 3%, then the Fed may well make a 25bp reduction at every meeting once they start with the first one. Shalom, The Mann P.S. For those that read to the end….One indicator I have seen shows Bitcoin at $240,000 next Summer. As I always, say, we shall see.
P.P.S. Two questions for you to research now that you will have to answer in the future. Are you an Accelerationalist or Deccelerationalist? And will you remain an entirely organic human (non-augmented) or have a machine imbedded into your brain to become a silicon-based superintelligent being (augmented)? If you will take the time to research these, you will thank me 5-10 years from now. Books to look into include The Singularity is Nearer and Homo Deus.
JUNE 14, 2024 – Well, the May report is in, and it clocked a 3.3% inflation rate, just a hair below my forecast of 3.4%-3.6% and the consensus estimate of 3.4%. Meanwhile, the 3-month annualized inflation rate is holding steady at 5.0%, and the 6-month rate is at 4.6%. These numbers are higher than the annualized rate of 3.3%, signaling that we’re likely to see the annual CPI stick around these levels or even climb a bit higher for the foreseeable future. Next month’s reading is predicted to land between 3.3% and 3.4%, but I’m betting it’ll come in a tad lower.
Remember my prediction from last month about the Fed’s December statement? They had high hopes of lowering interest rates three times in 2024, which seemed pretty optimistic. The market was more cautious, expecting just one reduction, maybe in September or December. Following the market’s lead, the Fed has now revised their statement, hinting at just one rate cut before the year wraps up.
Here’s my take: although the Fed publicly aims for a 2% CPI target, it sure seems like they’re content with it hovering in the 3.0-3.5% range. Intentional? You bet.
MAY 16, 2024 – The March report came in at 3.4%, at low end of my forecast of 3.4%-3.6% and below the consensus estimate of 3.5%. The 3-month annualized inflation rate is 6.7%. The 6-month annualized inflation rate is 3.8%. These figures are above the annualized rate (3.4%) and thus indicate the annual CPI should remain in this area or higher for awhile. The data is predicting a reading between 3.4% and 3.6% next month. I think this reasonable. The Fed’s December statement that they expect to lower interest rates 3 times in 2024 looks to be inaccurate. The market is expecting one reduction – maybe in September or December. It appears to me that although the Fed states their CPI target is 2% they are actually keeping it in 3.0-3.5% range on purpose. Shalom, The Mann
PS For those who read to the end, a tidbit of amazing information. By the Year 2100, the largest Age Group in the European Union will be 85 years and older. It won’t even be close. The second largest Age Group (55-59yo) will be about 60% the size. If you wonder why the world is going to robotics (Amazon has more robots than human employees now), it is because we simply won’t have enough human workers. The working age population worldwide is projected to decline beginning around 2050.
APRIL 11, 2024 – The March report came in at 3.5%, above my forecast of 3.0%-3.2% and the consensus estimate of 3.4%. No doubt about it, this was a strong inflation reading. The 3-month annualized inflation rate is 7.4%. The 6-month annualized inflation rate is 4.0%. These figures are significantly above the annualized rate (3.5%) and thus indicate the annual CPI should remain in this area or higher for awhile. The data is predicting a reading between 3.2% and 3.6% next month. I think the reading will be between 3.4% and 3.6%. The Fed’s December statement that they expect to lower interest rates 3 times in 2024 looks to be inaccurate. The market is expecting one reduction – maybe in June. As I always say, we shall see.
MARCH 13, 2024 – The February report came in at 3.2%, just above my forecast of 3.0%-3.1% and the consensus estimate of 3.1%. The 3-month annualized inflation rate is 4.3%. The 6-month annualized inflation rate is 2.2%. These figures bracket the annualized rate (3.2%) and thus indicate the annual CPI should remain in this area for awhile. The data is predicting a reading between 3.0% and 3.2% next month. I think this will be on target.
FEBRUARY 12, 2024 – The January report came in at 3.1%, just below my forecast of 3.2%-3.3%. and above the consensus estimate of 2.9%. The 3-month annualized inflation rate is 1.0%. The 6-month annualized inflation rate is 1.8%. These figures are lower than the annualized rate (3.1%) and thus indicate the annual CPI should drift lower. The data is predicting a reading between 2.6% and 2.7% next month. Like last month, I think this will be way off. Inflation is historically high in January and February. I am going to forecast 3.0%-3.1% for next month’s figure. ECONOMY – We have had 6 straight quarters of above 2% GDP growth since the recession in the first half of 2022 ended. The last two quarters have been above 3% (!) and some forecasts expect another 3%+ figure for the First Quarter of 2024. With annual population growth around 0.7%, any GDP growth above that amount is exceptional. The chance of a recession occurring this year remains slim to nil. It certainly won’t occur in the first half of this year. STOCKS – The Dow 30 continues its march towards 40,000. I never did see anyone else predict 40,000 this year. I suspect there are a few others like me out there somewhere. As they saay, never count your chickens before they hatch. 38k+ is not 40k. But, the stock market is saying the economy this Summer should be extremely strong. The recession mongers couldn’t have been more wrong for the past 20 months. They will continue to be wrong into the foreseeable future. Shalom, The Mann
JANUARY 13, 2024 – No one took me up on my offer to ask me to forecast something…anything. However, I have found a web site that holds forecasting contests on an ongoing basis. The main contest for this year has 36 questions. I won’t bore you with all of them. But, I will list my initial forecasts for a few questions you might find pertinent. I will likely change my %’s weekly or monthly. Here goes….The percentage after the question is my forecast. Will the S&P 500 Index go up over 2024? 90% Will annual US Core Inflation be above 3% in December 2024? 32% Will the Fed Funds Rate on December 31, 2024 be below 4%? 4% Will the US unemployment rate be above 4% in November 2024? 54%…this one is a tossup. A key word is ABOVE 4%. If it included 4%, I would be much higher on my %. There are several questions Re Trump and the Election and other political issues. I will just stick with economic questions here. We shall see how I do. It is nice to finally be measured on how accurate my forecasts will be. I will let you know the results when the contest is over – I believe that will be early next year. Shalom, The Mann
JANUARY 12, 2024 – The December report came in at 3.4%, below my forecast of 3.6%. and above the consensus estimate of 3.2%. Annual inflation of 3.4% was well below the double-digits many people were predicting at the beginning of the year and about double what I had forecast it would be. The 3-month annualized inflation rate is -1.4%. The 6-month annualized inflation rate is 1.1%. These figures are lower than the annualized rate (3.4%) and thus indicate the annual CPI should drift lower. The data is predicting a reading between 2.4% and 2.7% next month. However, I think this will be way off. Inflation is historically high in January and February. I am going to forecast 3.2%-3.3% for next month’s figure. Shalom, The Mann
DECEMBER 15, 2023 – First off, happy birthday to my dear wife. Back in April and June, I mentioned that the wave theory I follow showed a strong rally ahead. It would require us breaking through the all-time highs by a wide margin. This week the Dow 30 achieved new highs and is above 37,000 for the first time ever. 40k and possibly 44k in 2024 are on the table. They have been for over 6 months. With the information below it is time to 100% emphatically declare anyone that has forecast a recession for the past 18 months and into 2024 dead wrong. Their analysis is totally in error. Just fess up and admit with hat in hand you have no clue what you were talking about. You will feel better:) On to where the data stands and what it is telling us. BANKS – To date, we have had two bank closures that I am aware of. One was strange as it was not FDIC-insured. We will be ending the year much closer to my forecast of 0-10 closures than the 176-200 closures forecast by many people. I think we will be able to say the same next December. As for CRE loan defaults, I have dealt with about 5 bad loans. There has been no consistency as to why the loans went south. I am seeing nothing that indicates a lot of foreclosures nor anything specific to a property type. Amazingly, the Regional Bank Index (KRE) is up 58% from its yearly low and is back above where it was before the SVB/SBNY closings. Remember, buy when there is blood in the streets. It worked again. To reiterate, the market is saying that it does not believe there will be a CRE loan debacle for banks. Either not many CRE loans will default and/or banks are well prepared and capitalized to handle the defaults. HOUSING – Home prices have been up all year and the rate of appreciation is increasing. It isn’t much. That is a good sign as it can be sustained into 2024. The Homebuilders Stock Index was up over 5% one day this week and is now up an incredible 62% (!)from last year’s lows. On top of that, this is an all-time high. Those who forecast a crash in the housing market continue to be way off the mark. As I said all along, 7% interest rates are nothing to worry about. INTEREST RATES – Bonds bottomed on October 23rd. A strong rally has dropped rates by about 100bp already. A minor correction should start soon. Then after the new year, we will continue the decline in interest rates. The target is about 25-125bp lower than we are today. INFLATION – The December report came in at 3.1%, well below my forecast of 3.6%. The 3-month annualized inflation rate is 0.0%. The 6-month annualized inflation rate is 1.9%. These figures are lower than the annualized rate (3.1%) and thus indicate the annual CPI should drift lower. However, continue reading. Based on the data, my prediction for next month’s figure is 3.5%-3.6%. The January report should show annual CPI for 2023 to be around 3.5%. Then from the February report on into the Summer, the CPI should crumble towards 2%. SUMMARY – With the Dow 30, bank, and housing stocks at their highs, the markets are saying all should be well through the first half of 2024. The economy is supposed to be looking good in an Election Year. That looks to be the case again. I will reprint this statement from a post a few months ago: I put this hidden little sentence out there to refer back to in 12-18 months – The chance of a recession occurring looks to be 4th Quarter 2024 into 2025. The first year of the president cycle often sees an economic downturn. I suspect that a year from now the broken-clock recession mongers will have given up and admitted the economy is strong, et al. Just in time to be wrong again:) Happy Hannukah, Merry Christmas, and Happy New Year! Shalom, The Mann
NOVEMBER 25, 2023 – The November report came in at 3.2%, well below my forecast of 3.6%. The 3-month annualized inflation rate is 2.6%. The 6-month annualized inflation rate is 2.8%. These figures are lower than the annualized rate (3.6%) and thus indicate the annual CPI could drift lower. However, continue reading. Based on the data, my prediction for next month’s figure is 3.6%. The December and January reports should show annual CPI for 2023 to be just below 4%. Then from the February report on into the Summer, the CPI should be very steady at about 3% (say 2.8%-3.2%). Shalom and Prayers to my Brothers and Sisters in Israel. The Mann
