Latest / Markets with Megan: A Quick Financial Markets Update / Pre-War Inflation Was Heating Up | S3 E137 | 04-09-26

Transcript

Pre-War Inflation Was Heating Up | S3 E137 | 04-09-26 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: We're still getting data that occurred before the war with Iran, but this is important to give us an idea of how stable the economy was, what kind of an inflation environment were we in before we entered the war.
• 0:12
  Megan Horneman: It's Thursday, April the 9th, and this is Markets with Megan.
• 0:15
  Megan Horneman: If you like this podcast, you can subscribe, hit the alarm bell, share with your friends, family, or colleagues.
• 0:21
  Megan Horneman: But we're here today to discuss some of the economic data that we've received this morning.
• 0:26
  Megan Horneman: And while the markets are a little bit weaker today, I'm not so sure that has to do with this data.
• 0:30
  Megan Horneman: We are getting, you know, we had that big rally yesterday, and you're seeing some confusion around the ceasefire, you're seeing some violations around the ceasefire, and you're seeing the Strait of Hormuz really not open yet.
• 0:42
  Megan Horneman: So investors are taking a breather after that substantial rally that we saw yesterday.
• 0:47
  Megan Horneman: But it's very important to look at the data that we got today.
• 0:50
  Megan Horneman: So when we look at we got personal spending and income, um, over the past six months, we've seen real personal spending.
• 0:58
  Megan Horneman: So this takes it take it takes into consideration inflation.
• 1:02
  Megan Horneman: It um has only grown about 0.2%.
• 1:05
  Megan Horneman: It hasn't been able to grow above 0.2%.
• 1:08
  Megan Horneman: We've had months at 0.1, we've had months that were flat, but over the past six months, it's been very muted.
• 1:14
  Megan Horneman: So inflation is taking on some of that spending away from consumers.
• 1:20
  Megan Horneman: Because we saw in the month of February that incomes declined, but spending was higher, that we saw the personal savings rate drop to 4%.
• 1:30
  Megan Horneman: It's well below the past 20-year average of 6%.
• 1:34
  Megan Horneman: And remember, this is data for February, and this is before the rise that we've seen in oil.
• 1:40
  Megan Horneman: Now, the Fed's preferred inflation indicator that we got also with this report, it's called the core PCE index.
• 1:47
  Megan Horneman: That rose four tenths.
• 1:49
  Megan Horneman: It came in as expected, but on a year-over-year basis, core inflation is rising 3%.
• 1:55
  Megan Horneman: So well above the Fed's 2% target.
• 1:58
  Megan Horneman: When we looked at some of the spending numbers, we did see an increase in autos.
• 2:04
  Megan Horneman: That's probably going to filter into CPI data that we see tomorrow.
• 2:08
  Megan Horneman: We also started to see some of the rise in pricing from oil in transportation services.
• 2:16
  Megan Horneman: But within the Fed's preferred inflation indicator, because we don't have the oil in there yet, we did see some of that increase related to tariffs.
• 2:24
  Megan Horneman: So now when we start getting March and April's data, this is not only going to include tariff-related inflation, but also the big increase we've seen in commodities.
• 2:34
  Megan Horneman: So we do think that there is some concern about inflation in the coming months.
• 2:38
  Megan Horneman: And what this data has showed us is that inflation was already brewing before the war, and also that consumers were being squeezed by that inflation before the war.
• 2:49
  Megan Horneman: And as we said, we don't even have the data with all of the implications from the war in this, in these data reports that I've been giving you.
• 2:56
  Megan Horneman: So it does show that there might be some weakness here in the consumer in the second quarter when we start to get those GDP numbers.
• 3:04
  Megan Horneman: Now we'll be back tomorrow because we're rounding out the week with another inflation report that is very it tends to be very market moving, and that's the consumer price index.
• 3:13
  Megan Horneman: That's all we have for today.
• 3:14
  Megan Horneman: If you like this podcast, you're going to marketswithmegan.fm.
• 3:17
  Megan Horneman: Thank you.