Posted on 04/22/2024 10:20:24 AM PDT by EnderWiggin1970
Month-over-month inflation has been rising on average 0.4% for the past three months and 0.3% for the past six months.
If inflation continues to rise at this pace for the rest of the year, then year-over-year core CPI inflation will increase from currently 3.8% to 4% to 4.5%, see chart below.
Even if month-over-month increases in core CPI comes in at the historical average of 0.2% for the rest of the year, then year-over-year inflation will still end the year at 3%.
To get inflation back to the Fed’s 2% inflation target, core CPI for the rest of the year will have to come in at an unprecedented 0.1% month over month.
The bottom line is that base effects and strong recent readings complicate the Fed’s efforts to get inflation back to its 2% inflation target. Put differently, it will require a sharp, immediate slowdown in consumer spending and capex spending for the Fed to be able to cut rates by the end of this year.
So instead of happy news justifying a rate cut, we will see increasing pain and discomfort as the media is confronted with the reality that inflation is not under control. (Let's not even get into what happens if a 0.5 or 0.6% M-o-M figure hits the press.)
Rate cuts are most likely going to keep getting pushed out. Increasing, rather than decreasing, annualized inflation numbers will have pundits start talking about a need to increase rates again before things get too bad. While the Fed will not like the idea of raising rates, it will hate the idea of having to do so belatedly after inflationary fires have fully returned, even worse.
The next president will have an economic mess on his hands, courtesy of Democrat borrow-and-spend governance.
Real inflation is 12% to 15%.
The idiots at the Fed have been trying to avoid a “hard landing”. Ain’t gonna happen. The only way most people (the economy) is with a kick to the guts.
Crank the interest rates and flush out the idiots.
There is no inflation. Are you not listening?
This is more bolted in as a long lasting feature, the result of trillions in omnibus bills, Fed paper dollar printing and massive bills like the green deal, build back better, covid relief, etc.
It doesn’t matter what the government or media say about inflation numbers.
Real people see it with their own eyes. If prices go up in the grocery stores (they are) they note that. Buying food is fundamental and transcends politics. Same with gasoline prices.
Many? Most? people live paycheck to paycheck, and inflation hurts them more than those with more money. Telling them this pain is imaginary just insults them and doesn’t help.
> Real inflation is 12% to 15%. <
That sounds about right. And I suspect the Fed will tweak their measurement systems even more to produce “acceptable” inflation numbers.
By the November election the reported inflation rate will be down to essentially zero. Then time for the Fed to lower rates, and give Biden an election boost.
With our massive debt what are the chances of hyper inflation if the Fed doesn’t raise rates in time?
Why are you laughing/crying?
“Why are you laughing/crying?”
...laughing and crying, you know it’s the same release.
There will be no rate cut. If they were smart, they would increase rates at least 100 bps, more likely 200. But then that would cause the stock market to tumble, which would help Trump get elected.
I told you when I met you I was crazy.
😎👍
And just remember Inflation is cumulative.
It is not the FEDs job to monkey with interest rates. It is to control the supply of money. Which they have failed miserably at.
Inflation rates are a figment of some Bureaucrats computer. FED inflation is something like 3,000% so why quibble over phony monthly rates.
There is an equilibrium equation between the amount of money and the things it can buy. The money supply was pumped over a year ago. Since the amount of money printing has been restricted in the last few months any inflation remaining is the result of that equilibrium dying down .
And demagogue by yelling at "greedy corporations" for raising prices.
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