Inflation

[sptrawler]

Will High Inflation Persist?

The answer to when inflation will revert to its long-run average likely depends on whether we are still in the “Great Moderation” regime of less volatile inflation.

www.stlouisfed.org

Nice little article from the Fed about what will happen to inflation in the long run. Interesting that they considered the possibility that we E no longer in the era of great moderation

Well it solves the massive Govt debt problems and then they just have to reset the exchange rates and we start again.
The fiat system only works by confidence, as long as the plebs have confidence that they can still buy the same amount of maccas, after the inflationary cycle is finished, they're happy.
That is why one has to be careful what they invest in and why the uber rich invest in property. Lol

 

[waterbottle]

Forget Core CPI, Market Pros Are Searching for Supercore Inflation

More investors have put a greater focus on services inflation and labor market data as they try to grasp an increasingly complex inflation picture.

www.wsj.com

So CPI is no longer a good measure, nor is core, so we're just going to focus on employment and services. Gotta have a reason to hike

 

[over9k]

Gotta at least pretend like we're focusing on whatever the voting public is shitty about

 

[waterbottle]

Numbers out.
CPI @ 6.5%, as expected.
No beats.

Jobless claims however, are less than expected at 205K. Again, the employment market coming in stronger than expected....

 

[frugal.rock]

Numbers out.
CPI @ 6.5%, as expected.
No beats.

Their are all as expected, which is good news as they are all lower, except one consumer basket reading up a little.

The release of data sent a nice ripple around all markets but everything seems to have settled back into "business as usual" and remains on trend.... thus far that is.

 

[waterbottle]

Their are all as expected, which is good news as they are all lower, except one consumer basket reading up a little.

The release of data sent a nice ripple around all markets but everything seems to have settled back into "business as usual" and remains on trend.... thus far that is.

View attachment 151606

Let's see what the market does for the rest of the day.

Lots of commentators now hoping for a 25bps hike in Jan.

EDIT: Services inflation still climbing! JPowell's move was probably heralded in his "independence" speech - they'll have to make some unpopular decisions...

 

[frugal.rock]

Nearly everything currently trading is rising.... gold over 1900, crypto moving up, silver up 3%
and I nearly sold everything this arvo...
Hopefully it all sticks overnight.
What are the chances?

 

[frugal.rock]

Lots of commentators now hoping for a 25bps hike in Jan.

Will have to keep an eye on the monitor

 

[waterbottle]

Will have to keep an eye on the monitor

View attachment 151607

I hear you!

But how many times over the past year has the market been wrong?
Really the only reliable indicator has been JPowell who's stuck to the plan...

 

[frugal.rock]

The market is never wrong.... ?
just irrational.

With the employment numbers not down and the slight consumer basket rise, I have no doubts they will still stab the 0.5. Like the Irish say, to be sure, to be sure.
I'd expect the March meeting to be a 0.25 job though.
I dislike Christmas data, and there will be plenty of job cut data coming through.
That big snow storm they had must have dampened numbers this year.

 

[divs4ever]

Forget Core CPI, Market Pros Are Searching for Supercore Inflation

More investors have put a greater focus on services inflation and labor market data as they try to grasp an increasingly complex inflation picture.

www.wsj.com

So CPI is no longer a good measure, nor is core, so we're just going to focus on employment and services. Gotta have a reason to hike

they have been 'tweaking ' the CPI since the '80s , and finally they have tweaked it beyond a credibility factor

i guess the lesson to be learned is be very watchful whichever 'official figures' you use as a yardstick ( lest you get short-changed , yet again )

 

[InsvestoBoy]

Who knows.

Gun to my head, I would say surprise to the downside vs consensus. Mid 6 on headline and mid 5 on core.

To me, it's irrelevant.

Bang on my irrelevant forecast for both.

Outcome of being bang on: nothing.

Outcome if I had known the values a week a head of time: nothing.

Forget Core CPI, Market Pros Are Searching for Supercore Inflation

More investors have put a greater focus on services inflation and labor market data as they try to grasp an increasingly complex inflation picture.

www.wsj.com

So CPI is no longer a good measure, nor is core, so we're just going to focus on employment and services. Gotta have a reason to hike

"we're a Central Bank who doesn't know what money is and can't measure it, so we will try to measure our impact on money via proxies because we can't admit that we don't know what money is and can't measure it"

 

[sptrawler]

Still way too much money sloshing around in consumer land and the welfare/basic wage/covid stimulus still working its way through IMO.

In todays paper.

Shopping spree isn’t over yet, says UBS​

Consumers are in a far stronger financial condition than had been expected and are relying on savings to continue spending sprees.

 

[waterbottle]

Bang on my irrelevant forecast for both.

Outcome of being bang on: nothing.

Outcome if I had known the values a week a head of time: nothing.



"we're a Central Bank who doesn't know what money is and can't measure it, so we will try to measure our impact on money via proxies because we can't admit that we don't know what money is and can't measure it"

A disciple of Jeff Snyder?

 

[waterbottle]

Hmmmm

So was the COVID-zero strategy axed because Xi's stop loss was hit? China exports YoY down 9.9% for December, although still quite high compared to the Pre-COVID era.

 

[InsvestoBoy]

A disciple of Jeff Snyder?

It's Snider, but yes.

 

[mullokintyre]

Jim Chalmers has welcomed the fact that wages growth in the September quarter is faster than at any time since 2013.
From The evil Murdoch press

Treasurer Jim Chalmers says it is a "welcome development" that wages in the September quarter last year grew faster than any other time since 2013, adding that there may be real wages growth next year.

Treasury analysis of Australian Bureau of Statistics data showed the Wage Price Index increased 1 per cent in the September quarter to be 3.1 per cent higher over the year, the fastest through-the-year growth rate since the March quarter of 2013.

Dr Chalmers told ABC News Breakfast that this was the "beginnings of wages growth in our economy after the best part of a decade of wage stagnation".

"We expect wages to continue to grow but … we've got this inflation challenge in our economy, so people are still doing it tough," he said.

"But one of the most important things that we can do when people are under cost of living pressure is to do whatever we can to get wages moving again. We're pleased we're seeing the beginnings of that."

Dr Chalmers said the expectation is that Australians will see real wages growth next year, according to current forecasts provided by the Treasury.

"But that relies on some quite unpredictable forecasts when it comes to inflation, the wages growth that we're seeing in the economy is something that we hope we can sustain and obviously inflation will moderate over time," he said.

To get "real wages growth", the growth is going to have to be higher than the inflation growth.
Given that higher wages is in itself an input to inflation, it could be difficult to achieve that laudable aim.
Mick

 

[divs4ever]

Jim Chalmers has welcomed the fact that wages growth in the September quarter is faster than at any time since 2013.
From The evil Murdoch press

To get "real wages growth", the growth is going to have to be higher than the inflation growth.
Given that higher wages is in itself an input to inflation, it could be difficult to achieve that laudable aim.
Mick

would that be 'real wages growth' based on ( official ) CPI rises , or 'real wages growth' based on REAL CPI increases ?

sorry for my cynicism but have mostly lived in electorates that vote ALP ( including currently in Jim Chalmers one ) and have regularly been disappointed

since 2013 ? WHOPPEE ( with a definitely sarcastic tone )

given the recent ( last 10 years) RBA rates that is like a 'huge profit lift ' of a company that has produced a decade EBITDA losses

 

[UMike]

That's why Labor is so appealing to the ignorant.
Sounds great but anyone that knows about anything about finance or business roll their eyes.

 

[waterbottle]

China's GDP down to 3% for 2022, missing their target of 5.5%.
Cite supply shock, demand contraction and lowering expectations.

What would cause demand to contract?