Gregory Daco

Chief Economist @EYnews, @EY_US, @EY_Parthenon. Previously Chief Economist @OxfordEconomics, @IHSMarkit. Father of 3. Husband of 1. 🇺🇸 & 🇧🇪. Views are mine

[Gregory Daco @GregDaco]

The #Fed's new 7+1 #FOMC meeting schedule where the October meeting won't feature a policy decision, but instead focus on broad monetary policy strategy issue...

[Gregory Daco @GregDaco]

Scott Colom will become the first Black senator from Mississippi since the Reconstruction era, clinching a tight race by a few thousand votes in the clearest sign that the Democratic Party can win in deep-red territory.

https://t.co/CMAzU7gCaJ

[Gregory Daco @GregDaco]

Fed officials are in broad agreement that interest rates need to rise in order to tame inflation...

Less settled is the pace of those increases & how aggressive it will need to be in order to return inflation to 2% target…

https://t.co/z42EhuiEfH

[Gregory Daco @GregDaco]

Fed Forced to Confront Case for Bigger and Faster Rate Rises

https://t.co/L7E9nDRDbR

[Gregory Daco @GregDaco]

https://t.co/d0QePSMACl

[Gregory Daco @GregDaco]

US gas prices fall below $4 for the first time since July

The national average is down about 17 cents from a week ago and about 39 cents from a month ago, according to @AAA_Travel

https://t.co/4XqsgUh8wj

[Gregory Daco @GregDaco]

⚠️The transition rates into severe #delinquency for auto loans and credit card debt illustrates:

1⃣ Much greater stress on household finances for the 18-29 year-old, and the 30-39 year-old

2⃣ Stable trends with some improvements for credit card delinquencies for the 30-49yo

[Gregory Daco @GregDaco]

🇺🇸 @NewYorkFed Household Debt & Credit Report Q3 26

1⃣ Delinquency rate worsened 0.3pt to 5.0%

2⃣ New 30-day delinquencies worsened for autos/mortgages; improved for credit cards

3⃣ New 90-day delinquencies worsened for mortgages, steady for auto loans; better for credit cards

[Gregory Daco @GregDaco]

⛔️Transition rates into severe delinquency (+90 days) elevated but only rising slightly for autos & mortgages:

💳Credit cards: 6.9% 🆚5.3% pre-Covid
🚗Auto loans: 3.0% 🆚 2.4% pre-Covid
🏠Mortgages: 1.6% 🆚 1.2% pre-Covid
👩‍🎓Student Loans: 7.7% 🆚 9.2% pre-Covid

[Gregory Daco @GregDaco]

🇺🇸 #Inflation dynamics are concerning for two reasons. Their direction of travel and the underlying breadth.

📈Headline CPI
🔺12-mo: 4.1%
⬇️6-mo: 3.1%
🔺3-mo: 5.7%

📈Core CPI
🔺12-mo: 2.8%
⬇️6-mo: 2.7%
🔺3mo: 3.7%

[Gregory Daco @GregDaco]

📊Headline & core inflation picked up in October

📈Headline #CPI inflation 4.1%* (+0.4pt)
🔺+1.8pt vs. post-pandemic low

📈Core #CPI inflation 2.8%* (+0.2pt)
🔺+0.8pt vs. post-pandemic low last month

* Using Haver's gap-estimated figure because Oct 2025 data wasn't collected

[Gregory Daco @GregDaco]

⚠️Broad inflation pressures

1⃣ Food prices: groceries & restaurants

2⃣ Core goods: furnishings, drugs, video/audio, toys, textbooks, computers, smartphones, personal care

3⃣ Core services: intra-city transportation, hospitals, recreation services, auto insurance & repair

[Gregory Daco @GregDaco]

🇺🇸 Broad upside #inflation surprise in Oct

📈#CPI +0.4% m/m
⚠️Core +0.3%
🍲Food +0.5%
⛽️Energy +0.7%

🟠Core gds +0.2%
🚗New 0.2%
🚘Used -1.2%
👕Apparel 0.1%

🟠Core svc +0.3%
🏘️Shelter 0.3%
🏡Rent 0.2%
🏠OER 0.3%
🏨Hotel 0.7%
🏥Med 0.3%
🛫Air 0.4%
🏎️Car ins 0.7%

[Gregory Daco @GregDaco]

🚨 Fed Governor Christopher Waller on Tuesday said he supports an interest-rate hike in December, and warned that if inflation continues to accelerate (ie core CPI >=0.3% m/m) he would support a 50bps increase to protect the central bank’s credibility

https://t.co/Q9n66UJpbu

[Gregory Daco @GregDaco]

🇺🇸 @NewYorkFed median inflation expectations unchanged & elevated in October

➡️ 3.9% 1-year-ahead horizon (flat)
➡️ 3.3% 3-year ahead (flat)
➡️ 3.0% 5-year ahead (flat)

https://t.co/IAhCdPPJQN

[Gregory Daco @GregDaco]

Real wage growth has been negative for seven months -- the longest streak since 2011 (ex Covid) -- so the labor market remains disinflationary: via lower labor costs & via demand erosion/destruction

[Gregory Daco @GregDaco]

👍Oct '26 #Jobsreport: "As good as can be"

✅Payrolls +165k
✅Private +159k
✅Gds +15k
✅Services +144k
✅Gov +6k

✅Diffusion: 58%
✅Revisions Aug/Sep +84k

✅ #Unemployment rate: 4.1% (-0.1pt)
✅ Particip rate: 61.9% (+0.1pt)

📉Wages
✅+0.4% m/m
✅3.1% y/y (-0.1pt)

[Gregory Daco @GregDaco]

✅Wage growth is firming on a monthly basis -- great sign!!

And, no, this is not an inflation concern!