2024-04-04 03:25:00 ET
Summary
- Inflation pressures remain quite subdued; disinflation is still in place.
- The market continues to harbor a long-ingrained reflex that says that in order for inflation to decline, the economy needs to weaken.
- Low and declining inflation and moderate-to-strong growth can coexist indefinitely if the Fed is acting correctly.
A quick update to focus on some market-moving stats released on Wednesday.
Chart #1 shows the results of the March survey of purchasing managers in the service sector (by far the largest part of the economy). It is consistent with the view I've maintained for well over a year, which is that the economy continues to grow at a non-spectacular pace....
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Moderate Growth And Disinflation Still Alive And Well