Does saying the word “quiet” or the phrase
“things are quiet” make things busier at a hospital?
A. Yes, absolutely.
B. No, it is just a superstition like saying “MacBeth” in a theater.
Read all the way to the end to get the answer!
Call it a lull in the storm or all quiet on the western front, but last week offered a welcome respite from the volatility of recent months.
Devoid of major data releases or events, interest rates held steady, and equity markets edged upwards. This rise stems from the expectation that, eventually, the Federal Reserve will loosen policy and lower interest rates. However, the timing of this pivot remains the key question.
In the meantime, interest rates remain at elevated levels with the goal of containing inflation. And with the elevated levels of interest rates, consumers are paying more for the use of borrowed capital, specifically in the form of credit cards. While consumer credit growth seemed to downshift with a much lower rate of growth reported, the rate of delinquency on credit cards is starting to increase as consumers bear the increased cost of capital on credit card usage.
To offer a silver lining, while the rate of credit card delinquencies is increasing, it is increasing off of all-time lows and has yet to reach historical averages going back to the early 1990s. While the state of the consumer remains a focus, the real wage gains being seen in the labor market are helping consumers manage through this period of heightened inflation.
Europe and the United Kingdom are inching closer toward easing monetary policy as inflation seems to be on a more sustained decline across the Atlantic than here in the United States. As a result, those equity markets have found solid footing to increase expectations of lower interest rates on the horizon.
This week will be focused on the next U.S. Consumer Price Index report, which will serve as the next inflection point in the ongoing inflation saga for the Federal Reserve and investors. Key will be any signs that the recent uptick in inflation data is a “blip” on the policy radar and not an indication of anything more concerning.
- International Policy – The Bank of England is inching closer to rate cuts as a second vote ruled in favor of a rate cut.
- US. Employment – Initial jobless claims came in at 231,000, off of an estimate of 215,000.
- Consumer Credit – U.S. consumer credit came in at $6.3 billion versus estimates of $15 billion.
Credit Card Delinquencies on the Rise
Source: YCharts, Federal Reserve
Yes, absolutely.
According to a study by the Royal College of Surgeons, a significantly higher number of admissions occur during a night on-call period when the word “quiet” is uttered. So be careful about saying the Q word.1
