Yeh for housing very mixed, nothing too concerning and OER super lagged anyway.
Short term rents look to be accelerating (Zillow), with 3mma rates now back to 2024 highs , though WELL below 2022 etc. house prices seem to be stagnating yes.
Goods inflation is still in the pipeline I’d say and whilst the immediate impacts of tariffs last year has passed, the eventual impact of this year supply chain issues is still yet to be felt.
Part of the optics of why the 1yr inflation swap is so low is the 3month lag, and thus referencing Apr26 as a base month (high base effect). It will mechanically increase next month, but even generally when looking at the raw fixings it all seems a bit too low to me given the recent surge in Energy products/ Food.
Terrific note!
Thank you JWS for another great piece. An awesome read.
One question on your Butterfly Grids, if you don't mind (they are very cool).
Is it fairly 'simple' to keep an excel file updating those prices via BBG? or is this something you built with a different data provider?
Not sure if BBG options data for these contracts is good enough, and would love to learn.
Thanks again!
Best,
Valentino
Thank you. This is built simply using BBG feeds.
I have it set to settles (to hopefully improve accuracy a touch, and not blow out data limits). Fairly straightforward to construct.
Other vendors are available, Pricingmonkey, etc...
Thank you, will try to build my one and compare to yours. Appreciate the answer!
What's your view on the recent slowdown in housing inflation and the view that goods inflation has already passed its peak? Thanks!
Yeh for housing very mixed, nothing too concerning and OER super lagged anyway.
Short term rents look to be accelerating (Zillow), with 3mma rates now back to 2024 highs , though WELL below 2022 etc. house prices seem to be stagnating yes.
Goods inflation is still in the pipeline I’d say and whilst the immediate impacts of tariffs last year has passed, the eventual impact of this year supply chain issues is still yet to be felt.
Thanks!! To be honest , really can't understand why the 1-year inflation swap still low.... have any idea?
Part of the optics of why the 1yr inflation swap is so low is the 3month lag, and thus referencing Apr26 as a base month (high base effect). It will mechanically increase next month, but even generally when looking at the raw fixings it all seems a bit too low to me given the recent surge in Energy products/ Food.
Thanks~~ Btw, do you think real rates are at such high levels is related to AI? Or do you have any other thoughts ?
Multiple reasons out there (fiscal, asset allocation, CBs), but yes absolutely a key reason is the AI boom.