Per Bloomberg: "The US government’s budget deficit hit its highest since the Covid pandemic years in 2024, propelled by increased debt interest costs and higher Social Security and defense spending — which more than offset a boost in tax revenues. The shortfall for the fiscal year, which ended Sept. 30, came to $1.83 trillion, up from $1.7 trillion the previous year and the largest on record aside from the 2020 and 2021 fiscal years, US Treasury data released Friday showed." #economy #markets #econtwitter

The hope that some have that this US GDP data (below) would take some pressure off US government bond yields (and others) will be totally dashed unfortunately by another hot inflation print: Core PCE inflation came in at 3.7% for the first quarter, well above both the prior three months and the consensus forecast. This combination — weaker growth and higher inflation — is problematic for the economy and markets, with political and social spillovers. #economy #inflation #EconTwitter

Iran-Israel tensions and Markets: This morning’s combination of lower oil prices, higher yields and stronger stocks is a reflection of both what did not happen (no major casualties and damage this weekend) and a market view that further escalation in Iran-Israel tensions is unlikely. Meanwhile, the narrative among political scientists and national security experts is about a “new Middle East” where “lines have been crossed” and the future there is more unpredictable. #markets #economy

This worrisome chart from the @FT is part of a global phenomenon in which #debt continues to escalate. It is even more concerning for countries other than the US, which do not enjoy the relative financial benefits of being the world's reserve currency and a financial hub to which many others outsource the management of their savings. #economy #debt #markets #econtwitter

US government bond yields, including that on the 10-year (below), jumped today in reaction to yet another (slightly) hotter-than-expected #inflation print (this time PPI). Underlying this is spreading awareness of how relatively sticky inflation complicates the last mile to the #Fed’s 2% inflation target. #economy #econtwitter

This (below) comes from someone who is genuine, humble, and cares deeply about analytical accuracy. It comes at a time when others are saying that #inflation was transitory after all, it just took longer. Analytically, the transitory concept has an important behavioral component as it essentially signals the need for a "look through" rather than adaptations. The last three years of high inflation have encouraged/forced adjustments by households, companies, and governments. They have eroded purchasing power and hit the most vulnerable segments of our society particularly hard. foxnews.com/video/6348860642… #economy #econtwitter

As expected, the @ECB kept its interest rates unchanged. The market mover is elsewhere in that it notably revised down its 2024 inflation forecast (see chart below) on the back of more favorable non-services inflation. Market yields are lower as a result. Growth was also revised lower, slightly. #economy #markets #econtwitter