US Inflation Rate

[mullokintyre]

..stubborn.

In the USA, the monthly headline Consumer Price Index (CPI) rose 0.4 per cent, up from the 0.1 per cent increase in March; the annual rate dropped to 4.9 per cent - the first time in two years it’s been under 5 per cent - as last year’s larger rises drop out of the calculations.

Excluding the volatile food and energy components, the Core CPI also increased 0.4 per cent driven by higher rents, but, again, the annual rate ended up down slightly at 5.5 per cent. It was the fifth straight month that core prices have risen by 0.4 per cent or more.

The Fed has been at pains to say that its 2 per cent inflation target is still some way off and that it is prepared to increase interest rates further.

The newsflashes seem to suggest that now, not only will the FED put rates on hold, but that the next rate changes will be in a downward direction.






Given that the CPI is still sitting around 5%, well above the Feds target rate of 2 to 3 %, methinks the markets betting thinking is somewhat out of line.

Mick

 

[qldfrog]

The newsflashes seem to suggest that now, not only will the FED put rates on hold, but that the next rate changes will be in a downward direction.
View attachment 156834



View attachment 156833

Given that the CPI is still sitting around 5%, well above the Feds target rate of 2 to 3 %, methinks the markets betting thinking is somewhat out of line.

Mick

By raising the rate, the US is bankrupting itself. Can not afford to pay just interests on bonds so I expect the posturing I stop inflation was just that, did not really work that well and only a severe recession will put a dent on real CPI.
But recession and rates down is not necessarily such a great market boost

 

[mullokintyre]

By raising the rate, the US is bankrupting itself. Can not afford to pay just interests on bonds so I expect the posturing I stop inflation was just that, did not really work that well and only a severe recession will put a dent on real CPI.
But recession and rates down is not necessarily such a great market boost

Bloombergs have a a 25 bp cut in September factored in.
Not sure if a slowdown sufficient to cause a drop in rates will be advertised and accepted by then.
but if recognition of a slowdown/recession comes sooner, thats fine by me.
Mick

 

[wayneL]

...only a severe recession will put a dent on real CPI.
But recession and rates down is not necessarily such a great market boost

I predict a rise of the Austrians.

Von Mises, et al, will be proven right in an eventual reckoning.

 

[Boggo]

Interesting.

 

[farmerge]

Interesting.

View attachment 157520

Hmmm looking at this graph it would appear that the Trumpet's four years are somewhat better than Sleepy Joe's to date.
It's more of up, up and away.

 

[Boggo]

Hmmm looking at this graph it would appear that the Trumpet's four years are somewhat better than Sleepy Joe's to date.
It's more of up, up and away.

Comb over businessman Trump vs "weekend at Bernies" politician Biden

 

[divs4ever]

I predict a rise of the Austrians.

Von Mises, et al, will be proven right in an eventual reckoning.

well they applied MMT badly , totally predictable , human nature prevailed , maybe it would have worked under an absolute dictator , but folks worried about the next election had little chance , and of course fiscal responsibility was a recipe to get voted out ( maybe Trump could have sold it , but they sidelined Trump )

 

[mullokintyre]

Chuck butler in his latest newletter, makes the following point.

Deficit spending is getting out of hand once again...Speaking of deficit spending... Did you know that: The US National debt is up $1.8 trillion since the debt ceiling “crisis.”

It took the US 209 years to add the first $1.8 trillion in debt.

we just did it in just 8 weeks after a “historic” debt ceiling deal.

Denis Miller takes a stab at where it will be in 2027.
We really don't know how far it can go, his progostications are no better than anyone elses, but his reporting on what has recently happened with debt can't be as easily dispatched.


And on the other side of the credit ledger, the depositors are hauling money out at a huge rate of knots to pay for the things they don't buy on credit.


Perhaps this drawdown is going to pay down debt. from Zero hedge


Mick

 

[mullokintyre]

UPS has forshadowed a slowing down.
Actual packages sent were down 10% on the quarter, but return per package was up 3% (could it possibly due to inflation??).
Pehaps Americans are buying less?
From UPS

 

[Dona Ferentes]

Annual inflation in the US rose to 3.2 per cent driven by higher costs in food, energy, rent and caregiving, but the modest increase might be enough to persuade the Federal Reserve to leave interest rates unchanged next month.

Annual core inflation, which removes food and energy costs, dipped to 4.7 per cent from 4.8 per cent.

 

[mullokintyre]

The downgrading of the US feds by Fitch has been treated by some US commentators as tantamount to treason committed by a US company.
However, everything points to Fitch being perfectly correct in their assessment.
Mick

 

[frugal.rock]

"weekend at Bernies" politician Biden

Hilarious, still chuckling at that five minutes later.
He's a "Thunderbirds are go" puppet alright.

 

[Dona Ferentes]

Forward, forever onward.

 

[divs4ever]

Forward, forever onward.

View attachment 161024

there are lies , damn lies and statistics , so far the Fed is fixated on refining the statistics .. i wonder if they will patent the method so they can claw back the ( unrealized ) bond losses

 

[Telamelo]

The total outstanding debt owed by the US government is rising at an historic rate.

The Treasury’s FiscalData platform shows $97.7 billion was added to the national US debt between August 16th and August 22nd, bringing the grand total to $32.759 trillion at time of publishing.

US Debt Jumps $97,000,000,000 in One Week As Finance Expert Says 'Jaw-Dropping' Spending Will Fuel Era of Financial Repression - The Daily Hodl

The total outstanding debt owed by the US government is rising at a historic rate. The Treasury's FiscalData platform shows $97.729 billion was added to the national debt between August 16th and August 22nd, bringing the grand total to $32.759 trillion at time of publishing.

dailyhodl.com

 

[mullokintyre]

Texas has been one of the US success stories- a driving force with a big influx of citizens escaping some of the more moribund states with high taxation and high cost of living.
But even Texas is not immune to slow downs.
from Dallas fed



Its just a matter of time before everything starts to go backwards.
Mick

 

[mullokintyre]

Consumer confidence has taken a hit as well.
From Zero hedge

CONSUMER CONFIDENCE: US Consumer Confidence plunged to 106.1 in August, much beneath the expected (116.0) and the downwardly revised 114.0 in July. The Present Situation index dipped to 144.8 (prev. 153.0), while Expectations declined to 80.2 (prev. 88.0), back near the recession threshold of 80, reflecting less confidence about future business conditions, job availability, and incomes. Consumers may be hearing more bad news about corporate earnings, while job openings are narrowing, and interest rates continue to rise—making big-ticket items more expensive. Notably, expectations for interest rates jumped in August after falling two months ago. Moreover, the outlook for stock prices fell and average 12-month inflation expectations ticked up. The measure of expected family financial situation, six months hence (not included in the Expectations Index) softened further. Looking at some of the internals, Present Situation Consumers' assessment of current business conditions was slightly less positive in August, while Consumers' appraisal of the labour market deteriorated. Moreover, Expectations Six Months Hence Consumers were less optimistic about the short-term business conditions outlook, with Consumers' assessment of the short-term labour market outlook less favourable on top of consumers' short-term income prospects worsening.

One thing does not cause a recession, but the cumulative effects of multiple economic indeces will eventaully force folks into the realisation that a recession is becoming more and morelikely.
Mick

 

[Dona Ferentes]

from the intertweet..


.
"One reason inflation might come back with a vengeance: Even though the rate of inflation has fallen, we still are in possession of an inflationary psychology. People expect prices to rise, which causes them to act in ways that will cause prices to rise. If you want to eliminate the inflationary psychology, you need to cause a real honest-to-goodness recession, which brings about the associated deflation necessary to soften inflation expectations..."

 

[mullokintyre]

The total outstanding debt owed by the US government is rising at an historic rate.

The Treasury’s FiscalData platform shows $97.7 billion was added to the national US debt between August 16th and August 22nd, bringing the grand total to $32.759 trillion at time of publishing.

US Debt Jumps $97,000,000,000 in One Week As Finance Expert Says 'Jaw-Dropping' Spending Will Fuel Era of Financial Repression - The Daily Hodl

The total outstanding debt owed by the US government is rising at a historic rate. The Treasury's FiscalData platform shows $97.729 billion was added to the national debt between August 16th and August 22nd, bringing the grand total to $32.759 trillion at time of publishing.

dailyhodl.com

That total debt is about to come home to roost.
From Torsten Stark Apollo Academy

Unless the FED drops rates by goodly distance over the next short term issue, the US is going to have a much higher interest bill this time next year. And the following year, and the one after that ......
Mick