Consumer Credit Rose at a 1.5% Annualized Rate, Down From 3.6% in March… First-quarter credit rose 3.2%, less than the 2.4% rate in the last quarter of 2023.
What it means— Easing credit growth gives the central bankers what they want: an economy that is growing but not at a pace that calls for drastic action. By ever-so-slowly draining liquidity by shrinking its balance sheet, the Fed can keep a tight rein on changes in monetary policy. And then there’s the Fed’s Reverse Repurchase Program (RRP), which the central bankers use to fine-tune monetary policy. The RRP had about $700 billion in the pot at the start of the year; that fell to $327 billion in early April and now is back to $500 billion. While the Fed tells us how much in assets it will sell, we must keep an eye on the different ways it controls cash. It’s not sleight of hand, but it’s not exactly straightforward.
The Japanese Yen Breaks Above 160 per U.S. Dollar… The yen traded at 115 per dollar in January 2023. Just 16 months later, the yen has lost 40% of its value.
What it means— The yen is quoted backward, so when the yen is going up, it costs more yen to buy a U.S. dollar. Many analysts and investors thought the Bank of Japan (BoJ) would make a move when the yen reached 150. They were right, but it didn’t make any difference. The BoJ has intervened several times, and each time the yen strengthens and then slides. Investors don’t want intervention in billions of dollars, they want higher interest rates. So far, the BoJ is not willing to budge. Exporters are making a killing with the weak yen, and consumers aren’t making too much of a fuss. Local trading partners like Taiwan and South Korea don’t like it because it makes their goods more expensive, but that hasn’t been a big enough problem to call out the BoJ… yet.
Hertz Charges Client $277 for Refueling his Electric Rental Car… Joshua Lee was surprised to see an additional charge for his EV rental car. Not only had he checked the box for Hertz to recharge the vehicle, but also the maximum recharging cost was $35. None of that should have mattered, because Lee returned the vehicle 96% charged, the exact amount of charge it had when he picked it up. It took a while and several conversations, but Hertz eventually backed down.
Data supplied by HS Dent Research
“When the facts change, I change my mind.
What do you do?” ~ John Maynard Keynes
Our plan is “the plan will change.”
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