Inflation

[over9k]

U.K numbers in, worse than estimated.

 

[over9k]

This is what I mean when I say USA is best of a bad bunch.

8% vs 11%, roughly.

 

[waterbottle]

View attachment 149328

This is what I mean when I say USA is best of a bad bunch.

8% vs 11%, roughly.

What happens when the US is no longer the leader when it comes to the fight against inflation?
The EU and UK have been lagging. RBA has slowed down, but getting nudged by the IMF to keep hiking.

Are we heading into a currency war? Will the US start importing inflation and arrest their CPI decline should the rest of the world catch up?

 

[over9k]

Why would the U.S not be the inflation-beaters?

The yanks are energy self sufficient. Almost nobody else is.

 

[over9k]

Retail sales numbers now in, poured cold water on this idea that we're out of the woods as the demand side has taken an almighty hit.

Inflation dropping because demand has hey? Well gee, what a surprise...

 

[divs4ever]

What happens when the US is no longer the leader when it comes to the fight against inflation?
The EU and UK have been lagging. RBA has slowed down, but getting nudged by the IMF to keep hiking.

Are we heading into a currency war? Will the US start importing inflation and arrest their CPI decline should the rest of the world catch up?

maybe the new leader will be fiscally responsible ( yes sometimes i am an optimist )

the US has been using the currency as a weapon for decades ( Petro-dollar ) and used war to keep that dominance ( Libya , Iraq , as examples )

now the new majority currency will be a mystery , for instance China seems to be reluctant to claim the new reserve currency

will there be a BRICS composite currency , say based on a SDR ( special drawing rights ) formula

BRICS is suggesting a currency backed by commodities ( not just gold and silver )

 

[waterbottle]

Why would the U.S not be the inflation-beaters?

The yanks are energy self sufficient. Almost nobody else is.

In relation to IR hikes, not access to energy. BoE talking up big game with IR hikes. We've already seen the DXY fall over the past few weeks on the expectation that the Fed will soon slow down.

 

[waterbottle]

Retail sales numbers now in, poured cold water on this idea that we're out of the woods as the demand side has taken an almighty hit.

Inflation dropping because demand has hey? Well gee, what a surprise...

Also worth mentioning inflation expectations increased.
Canadian, Australian, EU and UK inflation rates are still high and aren't following the same trend that the US is on. Neither is NZ, who's central bank was one of the first to start hiking and are continuing to hike aggressively.

How much of the US' success against inflation is truly attributable to moderated consumption v. appreciation of the USD over the past few months, courtesy of the USD's status as reserve currency and the Fed's relatively aggressive hiking cycle?
If the Fed slows down its pace of hikes, and the rest of the world catch up, will the USD depreciate?
What happens to US inflation then?

 

[over9k]

Also worth mentioning inflation expectations increased.
Canadian, Australian, EU and UK inflation rates are still high and aren't following the same trend that the US is on. Neither is NZ, who's central bank was one of the first to start hiking and are continuing to hike aggressively.

How much of the US' success against inflation is truly attributable to moderated consumption v. appreciation of the USD over the past few months, courtesy of the USD's status as reserve currency and the Fed's relatively aggressive hiking cycle?
If the Fed slows down its pace of hikes, and the rest of the world catch up, will the USD depreciate?
What happens to US inflation then?

Appreciation of the USD is reason 1 and self-sufficiency/far lower effects of the russian oil (and in particular, gas) sanctions is reason number 2.

Reason 2 is actually the cause of reason 1 so there's a classic feedback loop helping them out as well.

 

[over9k]

Nothing but gut instinct here: We'll see another 75 point rise and then the 50's will start.

 

[mullokintyre]

Retail sales numbers now in, poured cold water on this idea that we're out of the woods as the demand side has taken an almighty hit.

Inflation dropping because demand has hey? Well gee, what a surprise...

1.3% was higher than even the most optimistic of forecasters had predicted.
California is poised to overtake Germany and become the 4th largest economy n the world according to Bloombergs
Given that California had handed out 9.5 billion in stimulus checks in early October, perhaps a big jump in retail sales should come as no surprise to those folk who believe that inflation is always and everywhere a money phenomenon , due to the increase in money supply and velocity thereof.
Mick

 

[waterbottle]

Nothing but gut instinct here: We'll see another 75 point rise and then the 50's will start.

Waiting on WSJ to leak.
CME fed watch tool pricing in 50bps as most likely.

 

[divs4ever]

Why would the U.S not be the inflation-beaters?

The yanks are energy self sufficient. Almost nobody else is.

capable of energy self-sufficiency , yes

but government policy and major investment is deliberately restricting/reducing that capability including refining capacity )

AND the US debt levels are so that the Treasury basically needs to inflate their way out of difficulty ( which is less likely to succeed because the US Treasury is still accelerating debt issuance even at rising rates

Australia is quite capable of being energy-sufficient , but decided to out-source most of the oil refining duties

 

[over9k]

capable of energy self-sufficiency , yes

but government policy and major investment is deliberately restricting/reducing that capability including refining capacity )

AND the US debt levels are so that the Treasury basically needs to inflate their way out of difficulty ( which is less likely to succeed because the US Treasury is still accelerating debt issuance even at rising rates

Australia is quite capable of being energy-sufficient , but decided to out-source most of the oil refining duties

Still better than europe, china etc.

 

[CityIndex]

Retail sales numbers now in, poured cold water on this idea that we're out of the woods as the demand side has taken an almighty hit.

It will be interesting to see what impact (if any at all) the UK's inflation data has on this narrative as well.

Yesterday's headline print came in at 11.1% while the BOE had been forecasting inflation to peak at 10.9%...

 

[over9k]

It will be interesting to see what impact (if any at all) the UK's inflation data has on this narrative as well.

Yesterday's headline print came in at 11.1% while the BOE had been forecasting inflation to peak at 10.9%...

All energy. Particularly so when all your disposable income is now being obliterated by your fuel, power etc bills.

 

[divs4ever]

History lessons: How ‘transitory’ is inflation?​

History lessons: How ‘transitory’ is inflation?

There's bad news for those who believe current inflation is transitory: history suggests once inflation peaks above 8%, as the US and much of Europe did this year, it takes a median 10 years to get the rate back to 3%.

www.firstlinks.com.au

depends on how many Chinese owned refineries are refining our petroleum products

 

[moXJO]

Retail sales numbers now in, poured cold water on this idea that we're out of the woods as the demand side has taken an almighty hit.

Inflation dropping because demand has hey? Well gee, what a surprise...

Yep.
Was expecting a rally but the market is extremely skittish. Be interesting to see if US midterms have broken the rule.

Since 1950, there have been 18 midterm election cycles, and in the twelve months following each of those cycles, the stock market has had positive returns.

US stocks have consistently earned positive returns after previous midterms, and delivered average annual returns of 18.6% compared to 10.6% in all other years.

If we lookout two years after previous midterm elections, the average return has been a blistering 33.7%.

Apparently the gridlock in Congress means shareholders don't have to worry about new regulations interfering with business.

Interesting to invest through this period.

 

[over9k]

Yep.
Was expecting a rally but the market is extremely skittish. Be interesting to see if US midterms have broken the rule.

Since 1950, there have been 18 midterm election cycles, and in the twelve months following each of those cycles, the stock market has had positive returns.

US stocks have consistently earned positive returns after previous midterms, and delivered average annual returns of 18.6% compared to 10.6% in all other years.

If we lookout two years after previous midterm elections, the average return has been a blistering 33.7%.

Apparently the gridlock in Congress means shareholders don't have to worry about new regulations interfering with business.

Interesting to invest through this period.

Trump also running again however

 

[waterbottle]

Japan now reporting 3.7% inflation. Not the first ountry to continue the trend of ever increasing inflation.
Inflation might be tamed in the US but it certainly isn't in Europe, Australia or Japan.
It begs the question - will these central bankers continue hiking despite a Fed pivot?