Post-Rally: Treasuries Decline, U.S. Retail Resilience, and Producer Prices Drop

In the aftermath of a rally, Treasuries experience a decline as astute traders meticulously assess data. Despite a tempered pace in U.S. retail sales preceding the holiday season, their resilience persists. Notably, producer prices exhibit their most substantial decline since April 2020, primarily attributed to a downturn in gasoline prices.

Inflation Eases: U.S. Producer Prices Fall Below Forecasts

Further indications of abating inflation are evident as U.S. Producer Prices experienced a 0.5% decline in October, with a mere 1.3% rise over the past year. These figures significantly deviated from consensus forecasts, which anticipated a 0.1% monthly increase and a 2.0% year-on-year upturn.

Inflation In Europe Running Hot

"The overall read for EU inflation comes in hotter than expected, with core inflation accelerating to a record 5.6%. Consumer prices rise 8.5% year over year vs an estimate of 8.3%. German 2-year yields hit new post-2008 highs."

--Lisa Abramowicz, Bloomberg

Central Banks Created All This Inflation Nightmare

"The Federal Reserve and other central banks spent over a decade deliberately creating inflation. We're now starting to suffer the consequences, as consumer prices must rise to find a new equilibrium price between the supply of goods for sale and the quantity of money available to buy them."

-- Peter Schiff 

The ECB Made An Error

"In 2018 the official inflation rate in the Eurozone was 1.74%. But the European Central Bank (ECB) thought 1.74% was too far below its mandate of inflation close to, but below 2%. So the European Central Bank (ECB) held the deposit rate at -.4% and continued a massive QE program to lift the rate closer to 2%. Now it's 8.4%!"

-- Peter Schiff

The End Of Desinflation

"Perhaps today's hotter than expected inflation data will be a wakeup call to investors that the CPI improvements in recent months were transitory. The 6.4 percent year-on-year rise in January CPI was two basis points above expectations and may mark the trough in year-on-year inflation rates and the end of disinflation."

-- Peter Schiff

China’s Negative Population Growth

For many years China had the one child program. They could only have one baby and it was in force so most people did not have enough children to replace the population and now they're paying the price for it.

Of course as any population ages, some people die if you're not not having new people, your population is going to decline. 

It's not been a very prosperous year for the world so it's normal that people don't have many babies when things are having economic problems.