INFLATION--FED announces 0.50% interest rate cut

[Monahorns]

Houses shouldn't be viewed as investment assets. They are homes. People live in them. That should be the primary focus on residential real estate. I get it, that makes houses valuable and so people will use them to make money. But all things being equal older homes would lose value not gain value. Only if demand increases should home values go up. Rate of population increase is a big reason. Here is another reason to reduce/stop immigration for now.

 

[mchammer]

Houses shouldn't be viewed as investment assets. They are homes. People live in them. That should be the primary focus on residential real estate. I get it, that makes houses valuable and so people will use them to make money. But all things being equal older homes would lose value not gain value. Only if demand increases should home values go up. Rate of population increase is a big reason. Here is another reason to reduce/stop immigration for now.

Government regulations preventing construction has made them investments.

 

[Chop]

There are people and forces out there who do not like the idea of common American people owning their own property.

And plenty of these same people are pushing to try to get Americans to lower their standards and expectations. Get used to a lower standard of living, it's all good, they say.

 

[nashhorn]

The push is for apartments, not residential housing.

 

[mchammer]

“I would expect food prices to fall over the next six months, that’s certainly the forecast here in the US,” said Joseph Glauber, senior fellow at the Washington-based International Food Policy Research Institute. “All the signs on the commodity side still point to essentially lower prices by the end of the year with the new harvest in. It’s just taking a while for this inflation at the consumer level to abate.”

 

[Monahorns]

Government regulations preventing construction has made them investments.

Yes. Government causes inflation and makes owning things harder for working Americans. Think about that the next time a Republican or "conservative" introduces a program to fix an economic issue.

 

[Chop]

“I would expect food prices to fall over the next six months, that’s certainly the forecast here in the US,” said Joseph Glauber, senior fellow at the Washington-based International Food Policy Research Institute. “All the signs on the commodity side still point to essentially lower prices by the end of the year with the new harvest in. It’s just taking a while for this inflation at the consumer level to abate.”

Driving through the N Central Texas countryside this past long weekend, it was field after field of corn as high as an elephant’s eye. If the Midwest looks like Texas does this year, it may be a bumper crop for corn, beans, wheat, etc , which would push almost all food prices down. Grains, meats, etc.

I understand it’s been dry in West Texas, so that’s not good obviously.

 

[Horn6721]

I read many parts of the Midwest were in drought

 

[mb227]

I read many parts of the Midwest were in drought

There you go...dashing water on our hopes and dreams...

 

[Horn6721]

hey mb
Blame Trump and climate change and white supremacists

 

[mchammer]

Labor report out today says wage inflation now down to 4.3% y/y. I am still expecting a shallow recession that will drive wage increases back to 3% since I see interest rates staying at 5+% for a while.

 

[mchammer]

https://www.wsj.com/articles/eggs-are-going-on-sale-just-months-after-prices-hit-records-e6e13aae

 

[mchammer]

 

[Horn6721]

the funny is for the warning content might be sensitive. Like egg prices back to normal

 

[mchammer]

Bureau of Labor Statistics releases the consumer price index for May. Consensus estimate is for the CPI to increase 4.2% year over year, while the core CPI, which excludes volatile food and energy prices, is seen rising 5.2%. This compares with gains of 4.9% and 5.5%, respectively, in April.

 

[mchammer]

Bureau of Labor Statistics releases the consumer price index for May. Consensus estimate is for the CPI to increase 4.2% year over year, while the core CPI, which excludes volatile food and energy prices, is seen rising 5.2%. This compares with gains of 4.9% and 5.5%, respectively, in April.

This is poor English. Better to say, “CPI is expected to be 4.2% higher year over year, which is down compared to the 4.9% print the prior month”.

 

[Horn6721]

It does not make sense to me to exclude food and energy prices.
How much more core can you get?
What don't I understand?

 

[mchammer]

It does not make sense to me to exclude food and energy prices.
How much more core can you get?
What don't I understand?

Core inflation includes rents, insurance, services, durable goods, etc. A lot of it is correlated with wage inflation. So the economists like to look at policy impact on wages.

 

[mchammer]

Bureau of Labor Statistics releases the consumer price index for May. Consensus estimate is for the CPI to increase 4.2% year over year, while the core CPI, which excludes volatile food and energy prices, is seen rising 5.2%. This compares with gains of 4.9% and 5.5%, respectively, in April.

Over next 6 months look for inflation related to housing to drop. Wage inflation is probably ~3.5% now and will be <3% by end of year.

 

[ViperHorn]

Bureau of Labor Statistics releases the consumer price index for May. Consensus estimate is for the CPI to increase 4.2% year over year, while the core CPI, which excludes volatile food and energy prices, is seen rising 5.2%. This compares with gains of 4.9% and 5.5%, respectively, in April.

Economists do not like to use things that fluctuate out of norms as they say that isn't a good indicator. Unfortunately, it also does not reflect reality.

 

[Horn6721]

mc
Thanks for explanation .Shows how weird Gov't can be
Interesting the Fed consider durable goods and insurance but not food and energy. Those 2 are more important to the Consumer (C of CPI) to you know actually stay alive.

 

[HornHuskerDad]

Interesting the Fed consider durable goods and insurance but not food and energy. Those 2 are more important to the Consumer (C of CPI) to you know actually stay alive.

Great point, 6721. I have found that I can postpone purchasing a new refrigerator or furniture, but the need to purchase food seems to be a constant (in my home, that's especially true of cat food).

 

[Horn6721]

HHD
A man has to have priorities.

 

[mchammer]

Headline inflation now down to 4.0%. Fed probably wants it down to 3.0% before lowering rates (a gap of at least 2.0% points).

 

[ViperHorn]

Headline inflation now down to 4.0%. Fed probably wants it down to 3.0% before lowering rates (a gap of at least 2.0% points).

So over the last 24 months inflation is only up 12% and the unemployment rate is beginning to creep up.. Rates are not going to come down anytime soon.

 

[mchammer]

So over the last 24 months inflation is only up 12% and the unemployment rate is beginning to creep up.. Rates are not going to come down anytime soon.

Economists focus on future inflation, not inflation in the rear view mirror. If past inflation made you poorer today, well you can give your thanks to Biden and Powell. I am not defending those redistribution yahoos.

 

[ViperHorn]

Yes, economists love to move the goalposts. Unfortunately, the remainder of us have to live in reality.

 

[mchammer]

Chocolate, sugar, and coffee are outpacing inflation:

Global Cocoa Shortage Sends Prices Soaring As "Consumers Should Brace" For 'Chocolateflation' | ZeroHedge

 

[Chop]

Chocolate, sugar, and coffee are outpacing inflation:

Global Cocoa Shortage Sends Prices Soaring As "Consumers Should Brace" For 'Chocolateflation' | ZeroHedge

My friend, Left-leaning Chop, said that a substantial sin tax should be placed on sugar and chocolate. Left-leaning Chop also said that you shouldn't be eating chocolate anyway--much of the cocoa in chocolate is grown and harvested using slave labor.

Oh yeah, Left-leaning Chop also said that you should only drink "fair trade" shade-grown coffee, but I don't know what he's talking about...

 

[mchammer]

Wage inflation now down to low 4%. It was 3% before Covid. It will drop to 3% by year end as job gains have slowed considerably.

June Payrolls Tumble To 209K, Lowest Since 2020 And First Miss In 13 Months, But Wages Come In Hot | ZeroHedge