Inflation

[waterbottle]

Crude is now at 78usd/barrel... that's almost 20% higher than what it was a few weeks ago. Any reason why? Any likelihood of it continuing higher?
Along with higher food prices, this is going to pave the way for MoM headline inflation to increase

 

[mullokintyre]

Crude is now at 78usd/barrel... that's almost 20% higher than what it was a few weeks ago. Any reason why? Any likelihood of it continuing higher?
Along with higher food prices, this is going to pave the way for MoM headline inflation to increase

Perhaps one of the reasons is the reduction in Supply.
Peter Zeihan talks about the energy collapse in Mexico.
There is also reported declines in Russian Oil production
The following table from Mckinsey might provide a few other clues.

Mick

 

[mullokintyre]

A sign of rampant inflation?
Would you pay $16 bucks for a bucket of chips?
Must be awfully expensive sauce.
mick

 

[farmerge]

A sign of rampant inflation?
Would you pay $16 bucks for a bucket of chips?
Must be awfully expensive sauce.
mick

View attachment 160042

Hmm Gentleman's Cafe, and the waitstaff, perhaps female topless!!

 

[mullokintyre]

Hmm Gentleman's Cafe, and the waitstaff, perhaps female topless!!

Ya need to get ya eyes tested, Farmer, it was the Cattlemans Cafe on Mt Buller.
No Gentlemen there, I could vouch for that!
Mick

 

[farmerge]

Ya need to get ya eyes tested, Farmer, it was the Cattlemans Cafe on Mt Buller.
No Gentlemen there, I could vouch for that!
Mick

Ouch, have put the spectacles on and you are so correct, Mick.
And obviously some sort of" sauce" is the expensive bit.

 

[over9k]

Crude is now at 78usd/barrel... that's almost 20% higher than what it was a few weeks ago. Any reason why? Any likelihood of it continuing higher?
Along with higher food prices, this is going to pave the way for MoM headline inflation to increase

Recession fears subsiding. Remember this post:

Brent crude now nosediving too. There's your recession fear indicator, none of this yield curve inversion rubbish.

No shortage of narrative about a "surprisingly soft landing" or words to that effect now. There's also been some more action in the ukraine war/black sea now too and markets are being quite responsive to that as well.

 

[over9k]

 

[farmerge]

Recession fears subsiding. Remember this post:



No shortage of narrative about a "surprisingly soft landing" or words to that effect now. There's also been some more action in the ukraine war/black sea now too and markets are being quite responsive to that as well.

Petrol price at the local servo at Midland $1.67 a litre today

 

[Dona Ferentes]

Ouch, have put the spectacles on and you are so correct, Mick.
And obviously some sort of" sauce" is the expensive bit.

I think Mt Buller , ski resort , captive audience, is the expensive bit.

 

[mullokintyre]

June quarter CPI lower than consensus at 0.8 versus 1.0 expected.
Once again, services remain strongly inflationary, but price of fuel and many goods moderated.
Will the RBA decide thats enough?
Not sure, though cant see any interest rate cuts yet, which is what some commentators are suggesting is the next move.
mick

 

[Knobby22]

June quarter CPI lower than consensus at 0.8 versus 1.0 expected.
Once again, services remain strongly inflationary, but price of fuel and many goods moderated.
Will the RBA decide thats enough?
Not sure, though cant see any interest rate cuts yet, which is what some commentators are suggesting is the next move.
mick

You would have thought that in this environment, services costs would start to fall due to competition.
My guess they will waive a potential hike in the air as a warning but not do it - at least this month.

Philips Lowe's retirement is early September so if he wants to give his successor clean air then he may push another rate rise then.

 

[Dona Ferentes]

Mr (Local) Market certainly liked the news.

 

[over9k]

edit: video not displaying

 

[waterbottle]

June quarter CPI lower than consensus at 0.8 versus 1.0 expected.
Once again, services remain strongly inflationary, but price of fuel and many goods moderated.
Will the RBA decide thats enough?
Not sure, though cant see any interest rate cuts yet, which is what some commentators are suggesting is the next move.
mick

Food and crude oil have enjoyed a spike since July.
Inflation is still outside of the target band and remains high.
Pause more likely.

I think we're moving into the plateau phase of hikes before we either rapidly cut again or we manage to keep them this high for 1-2 years.

 

[over9k]

Fed raises by 25, says that there wasn't even disagreement this time, vote was unanimous. Markets entirely unmoved by the decision so, yeah, it was already priced in.

Critically however, they have now stated that the benchmark rate is now 5.25-5.5%.

You know, higher. We already had the "for longer" given to us days (weeks) ago, now they've confirmed the "higher" part of "higher for longer".

Exactly as I have been saying was going to happen for months.

Hilariously, they're even now saying that "normal modelling is no longer valid" which is just a tacit admission that uncertainty now abounds/we are now living in unusual times/that things have not and are not going to return to normal.

I'm going to call it now and say that the next thing they'll state (admit) is that we're living in a new paradigm/that the old way(s) of thinking (and modelling) no longer apply and we need a whole new approach or what have you. Only problem there is that then people are going to ask them what said new approach/philosophy is so there's no way in hell they're going to admit anything until they have at least some idea of what said new philosophy/approach needs to be.

That might take quite some time.

 

[over9k]

This is also going to add more fuel to the fire re: australian rates being "so far behind the rest of the world" or what have you that is currently dominating headlines over here.

Something tells me the old "australia is different" bull**** is going to be rolled out in response yet again.

 

[over9k]

5.5 looking likely at this stage.

 

[over9k]

Meta reports earnings beating expectations, same as google reported better-than-expected yesterday.

Earnings beats now counteracting rate rises again. Groundhog day.

 

[waterbottle]

Larry Summers' 6% prediction in 2022 doesn't seem that crazy anymore.