Sonu Varghese
@sonusvarghese
Musings on investing, the economy & all else. VP, Global Macro Strategist @CarsonGroupLLC. Advisory services through CWM, LLC, Registered Investment Advisor.
CHART OF THE DAY: America has an electricity problem. Retail power costs in the US are rising very, very quickly (>35% over the last 5 years) — in some part due to expensive grid investment. My @Opinion colleague @liamdenning has the details here: bloomberg.com/opinion/articl…
Check out @sonusvarghese's take on the Fed and potential monetary policy moves: carsongroup.com/insights/blog/…
Appreciate @TheStreet for sharing our outlook for the rest of 2025! thestreet.com/markets/histor…
Volume over price? @SamuelRines
cheap stuff is getting more expensive. expensive stuff is getting cheaper - @WSJ wsj.com/business/retai…
Tariff impact is showing up in inflation data, but … There’re big disinflationary forces too: shelter + airfares/lodging (due to soft aggregate income growth) Fed’s in a bind - cut rates & risk looking foolish, or wait until weakness get worse. New blog 👇 @carsonresearch…
Dallas Fed's Lorie Logan: "My base case is that we'll need to keep interest rates modestly restrictive for some time" But "it's also possible that some combination of softer inflation and a weakening labor market will call for lower rates fairly soon."
Average effective tariff rate is ~ 10pp higher, after the pauses, pullbacks, & tacos That was the "best case" scenario pre-Liberation Day 🤔We have the best case now + OBBB at the margin So perhaps not a surprise that markets are at new highs & earnings expectations are 💪
GS thinks a higher effective tariff rate, but slower to get there
Also back before 50% copper tariffs.
Back when America knew how to build things.
Great morning note from @philrosenn here 👇 Thanks for including my thoughts on the new market highs. Momentum works 💪
New newsletter: Stocks keep hitting records even as odds for Fed rate cuts go down. Strong economic data from inflation to retail sales have had the dual impact of making investors more optimistic while delaying any move from Powell. For investors, this is a momentum market.
Jerome Powell is up against the ropes. @sonusvarghese explains why the walls are caving in around him. carsongroup.com/insights/blog/…
New highs cluster! Momentum is a powerful thing
Number nine! Today was the 9th new all-time high of 2025 for the S&P 500. Since 1957 (when it became 500 stocks) today was ATH number 1,250. Congrats to those who followed their investment plan back in April.
Adding to Neil's point ... restaurant/bar sales ("food services") also impacted by higher prices June Sales: +0.57% CPI - Food away from home: +0.44% Last 3M (annualized) Sales: +1.3% CPI - Food away from home: +4.7% Real restaurant spending has flat-lined over the past year
Retail sales beat estimates, but enthusiasm ought to be tempered somewhat given the pick-up in consumer goods prices over the month. These are nominal dollar values. Core goods CPI ex autos rose 0.6% over the month. Real goods spending was soft in June.
Feds not going to cut rates in July or September Now I’m off to grab the popcorn 🍿
Today's news: Initial claims lower, earnings solid, and retail sales better than expected. So many keep telling us a recession is coming, we continue to take the other side.
😲 I imagine Powell would have to go home (unless he lives in the building, or "palace" as Trump calls it), and then Trump can block access to the building the next day. Or can Powell just work from home, as Fed Chair ?!? So many questions ...
Removing Powell as Fed chair could lead to a messy, drawn-out standoff. The Fed owns its buildings and controls its security. If Trump attempts removal, Powell could try to stay until the courts uphold it or the Senate confirms a replacement. wsj.com/economy/centra…
Something that’s not talked about much in the context of tariffs … Rising food prices 👇
Food prices are broadly rising, in part due to tariffs (something I neglected to cover in my CPI thread)... Wouldn't be surprising if restaurants are marking prices up accordingly.