INFLATION--FED's cutting rates again...

The shelter index increased 6.5 percent over the last year, accounting for nearly 70 percent of the total increase in the all items less food and energy index.

Other indexes with notable increases over the last year include motor vehicle insurance (+19.2 percent), recreation (+2.5 percent), personal care (+5.2 percent), and new vehicles (+1.3 percent).
 
mchammer said:
3.1% headline CPI. More work to do get it down to 2%.
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Or maybe just more time (see graph below where impact of money supply is still happening):

IMG_8112.jpeg
 
Housing is still out of control. Of course, We don’t want a housing market price crash. That brings on even worse problems. Hopefully a long steady plateau of housing prices—so everything else can catch up.
 
Basically it’s housing and insurance now and maybe a little wage inflation.
 
Horn6721 said:
Because No one needs to eat heat their homes or drive anywhere.:brickwall:
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Heating my home and the price of gasoline are the least of my worries. Home insurance, airfare, cost of a new car, auto insurance, appliance repair, orthodontics, etc have inflated greatly.
 
mchammer said:
Heating my home and the price of gasoline are the least of my worries. Home insurance, airfare, cost of a new car, auto insurance, appliance repair, orthodontics, etc have inflated greatly.
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Good observation, mchammer. Insurance is a huge outlay for both home and auto. I cringe when I see those bills come in. But cost of food is still a major concern - I feel the pinch every time I go to the Commissary.
 
I didn't read the link. If the costs of food heating insurances utilities and nearly everything has risen what other than nat gas didn't go up?
What is in the core?
 
Horn6721 said:
I didn't read the link. If the costs of food heating insurances utilities and nearly everything has risen what other than nat gas didn't go up?
What is in the core?
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You are conflating different inflation reports. One is producer prices. This obviously doesn’t include insurance, housing, etc. It does include food and energy, which is excluded for the core inflation. Both headline and core inflation were low for producer prices (0.9% and 2.0%, respectively).

The other measure is CPI, which does include things like insurance and housing. In this measure, 70% of the 3.1% headline number is housing inflation. The other large contributor was auto insurance.
 
mc
Thanks. I should be able to keep them separate.
All i know is for me and everyone i know has seen costs rising everywhere.
 
HornHuskerDad said:
Good observation, mchammer. Insurance is a huge outlay for both home and auto. I cringe when I see those bills come in. But cost of food is still a major concern - I feel the pinch every time I go to the Commissary.
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The one that raised my eyebrows was the property tax bill. Property values have gone up so much, but the rates have remained constant, resulting in a much larger than normal tax bill.

One of the ballot State Constitutional Props that passed may give some small level of relief.
 
Monahorns said:
Powell caved to Presidential pressure to ease off the interest rates to avoid a recession in 2024. If inflation isn't solved it won't matter. Normal people need a year or 5 of gradual price deflation to get to a level somewhere in the 2000s.

Will Powell’s Pivot Bail Out Biden? | Tho Bishop
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As long as interest rates are above the inflation rate we are good - it will just take longer to reel in inflation. There are ways to calculate what the interest rate should be above inflation (aka the real interest rate). I think Powell simply agreed to apply that method starting in March 2024. Current Fed interest rate is 5.5%. Assuming the delta is 2% and inflation is currently <3.5% and heading down, then yes you can say with some confidence that you can start cutting by March or April.
 
mchammer said:
As long as interest rates are above the inflation rate we are good - it will just take longer to reel in inflation. There are ways to calculate what the interest rate should be above inflation (aka the real interest rate). I think Powell simply agreed to apply that method starting in March 2024. Current Fed interest rate is 5.5%. Assuming the delta is 2% and inflation is currently <3.5% and heading down, then yes you can say with some confidence that you can start cutting by March or April.
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I would generally agree with that plan, but maybe push it back a few months. Hold the line where it's at for a while longer.
 
Chop said:
I would generally agree with that plan, but maybe push it back a few months. Hold the line where it's at for a while longer.
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No one knows for sure what will be the situation by mid-March. Could be a recession by then.
 
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