Subjective market review (13-Feb-2024). In the US we got the January federal budget numbers (in line with expectations) and NY FED survey of consumer inflation expectations with the slight improvement on 3Y time horizon (3-year expectations fell to 2.4% from 2.6%, what is beneath the pre -2020 average of 2.9%) – but with little market reaction.
The Cleveland FED inflation nowcast model indicates +0.13% monthly headline inflation (consensus +0.2%), and +2.94% on YoY basis (consensus +2.9%). This model’s reading means that the 3-month annualized rate for headline inflation will increase to 2.14% from 1.79%.
In the case of core inflation nowcast, the model indicates +0.32% MoM (Wall Street consensus +0.3%) and 3.81% YoY (consensus +3.7%). This reading means that the 3-month annualized core inflation rate will increase from 3.33% to 3.72% - see Figure 1.
In the case of the federal deficit, in January it amounted to $21.93 billion (a year ago in January it was $38.78 billion). On a 12-month basis, the deficit as a % of nominal GDP decreased from 6.38% in December to 6.32% in January.
Government spending amounted to $499.25 billion in January (a year ago in January, $486.07 billion). On a 12-month basis, spending as a % of nominal GDP increased from 22.57% in December to 22.61% in January. See Figure 2.
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