Today’s industrial production reading for December show IP improving from -5.41 YoY in November to -3.58% YoY in December. Capacity utilization increased from 73.39% in November to 74.54% in December. So, Biden is inheriting an improving economy.
Meanwhile, equity markets are down across the board.
The aid package includes $415 billion to bolster the response to the virus and the rollout of COVID-19 vaccines, some $1 trillion in direct relief to households, and roughly $440 billion for small businesses and communities particularly hard hit by the pandemic.
Stimulus payment checks would be issued for $1,400 – on top of the $600 checks delivered by the last congressional stimulus legislation. Supplemental unemployment insurance would also increase to $400 a week from $300 a week now and would be extended to September.
Since The Fed’s favorite inflation measure, core Personal Consumption Expenditure Expenditures (PCE) growth was 1.40% YoY at its Q3 2020 reading, the latest M1 and ISM Price readings indicate the US Core PCE YoY is likely to rise as well.
(Bloomberg) — Federal Reserve Bank of Chicago President Charles Evans said the U.S. central bank shouldn’t be shy about letting inflation run, as it has promised, above its 2% target in order to make up for years of undershooting that goal.
“If we try to fine-tune a very modest inflation overshoot of only a 10th or two, we run a very large risk of failing to achieve our 2% averaging goal within any reasonable amount of time,” Evans said Monday during a virtual presentation to the annual meeting of the American Economics Association.
Hmm. Don’t be shy, but why is The Fed’s Dots Plot showing an increase in the Fed’s Target rate AFTER 2023?