The Nattering Naybob does a more than able job of rounding up today's data releases, which did a great impression of everything we thought we knew yesterday: An industrial production report suggesting continued strength in the manufacturing sector, data on housing starts that confirm a slowdown (but no "crash") in the residential real estate market, and lousy headline inflation on the producer price index, softened by benign growth in the core measures.
Mr. Naybob reflects on the news, and concludes:
Housing is starting to tank, industrial production is up, capacity utilisation is tightening to new highs, leaving little or no economic slack, and inflation is already SMOKIN... can you say no FED pause, I can.
But Calculated Risk reminds us of this opinion, from Tim Duy:
... at this point is that the Fed intends to pause at the next meeting while awaiting data that calls into question their expectation of slowing demand later this year. In this light, they will discount nominal signals such as prices and focus on real indicators.
These comments nicely reflect the two schools of thought regarding what the FOMC is likely to do next: Those who think the Committee is leaning to more rate increases unless the data cooperates with reasons to expect the abatement of inflationary pressures, and those who think the Committee wants to pause, and will take that course unless the data removes any justification for doing so. In either case, I doubt that today's news will move anyone off of their prior convictions.