Yep. I think people forget the Fed isn't meeting until Sept. Which means they will have this data from July and then August data to digest. Very positive news lately but need to keep it up. Fed should increase interest rates but it's just a matter of how much imo.
Except it's difficult to discern which end is the head and which end is the ass?
Good discussion. I'm not sure the Fed is primary. It's a major piece, but energy prices, labor supply, supply chain issues, fiscal policy, and other supply side concerns outweigh the Fed in aggregate, imo. Some may even outweigh the Fed individually, although Fed policy may also impact these. Non-interest setting monetary policy is also pretty important, imo.
You are ahead of me in that prediction, but you have good reason for it. I'm still holding out for a little more data.
Yikes, looks like the algorithm already rotted your brain. #godspeed Pepsi
Also the summer travel season is ending which will help slowly bring down prices in certain sectors of the economy.
Um, no. Dem spending and Biden energy policy has been a major driver of inflation.
What are you looking at - gas or something else? I can see it might shift consumption patterns, but I'm struggling to think of where it might affect demand outside of gasoline and possibly jet fuel.
Still sticking with energy policy huh? What energy policy did Biden change recently to make prices go down?
Hotels are less than 1% weight in CPI, iirc, and airfare is part of transportation services. One of the big headwinds we are facing is shelter costs, because those are delayed entries in many cases (around 6 months for some parts, I think). Here's a chart that provides some breakdown of how CPI-U is calculated.
We agree wholeheartedly about QE being a bigger issue. I think the MBS purchases played a substantial role in driving housing prices up, which is a large chunk of what we're seeing. It will just take quite a while for that to unwind, imo.
I also think the pandemic itself had A LOT to do with inflation. You can't have major supply chain issues and shortages and not expect some inflation. That, coupled with delayed demand and there you go along with the Fed issues you mentioned.
Anxiously awaiting the mental gymnastics on the response to this post...
Yep and quite simply, housing prices could not continue to go up by 10% + on an annual basis. It's just not sustainable. A slowdown in this sector is good for the economy overall.
LMAO @ the Fed has the tools to slow this train down.
In prior inflationary times the Fed was able to have more of a role and effect. This time around has seen unprecedented government spending, along with energy issues that are only rivaled by the late 70's.
I had this 4200 area for the S&P as significant resistance. I have unloaded some longs,
LOL. Nothing really public at least. Sometimes, letting other people do their jobs is doing something. Trump would have had a few successes if he understood how to do that.
Interesting outcome today, that can be spun by either doom-casters or sunshine-shovers.US inflation rises more than expected in September
Efforts to tame inflation in the US have pushed up the dollar and global borrowing costs.www.bbc.com
Consumer prices in the US rose more than expected last month in a sign that the inflation fight in the world's largest economy is far from over.
Inflation, the rate at which prices rise, was 8.2% in the 12 months to September, down from 8.3% in August.
Despite the fall, the figure was still higher than forecast.
Inflation in the US is being closely watched as the US central bank's efforts to tame the problem push up the dollar and global borrowing costs.
The rate is well above the central bank's 2% target and means the Federal Reserve is likely to continue to keep raising interest rates in an attempt to cool rising prices.
"The Fed needs to react at the next meeting and continue to keep policy tight until there is some sign that inflation is under control," said Neil Birrell, chief investment officer at Premier Miton Investors.
"This print raises the level of uncertainty and is bad news for the economy overall, but for consumers in particular. The peak in interest rates will, in all probability, be higher now. It's difficult to find any positives in this for the economy or markets."
Trajectory remains, rate has changed.
