Quote:NEW YORK (Reuters) - U.S. consumer prices increased solidly in February amid higher costs for gasoline and shelter, suggesting some stickiness in inflation that could delay an anticipated June interest rate cut from Federal Reserve.

The consumer price index (CPI) rose 0.4% last month after climbing 0.3% in January, the Labor Department said on Tuesday. Gasoline and shelter, which includes rents, contributed more than 60% to the monthly increase in the CPI. In the 12 months through February, the CPI increased 3.2%, after advancing 3.1% in January.

https://www.msn.com/en-us/money/markets/...r-BB1jLfl3

LONG WAY OUT

I was waiting for Tom to post this. Must be busy. Never in our history has the FED stated they will drop rates in the coming year until last year.

(03-12-2024 10:34 AM)Eagleaidaholic Wrote:  I was waiting for Tom to post this. Must be busy. Never in our history has the FED stated they will drop rates in the coming year until last year.

He doesn't believe everything he sees on the internet when it paints Paw Paw Joe in a bad light.

Quote:The government's best-known measure for the cost of living tracks the price of hundreds of goods and services every month, but one important expense is not included in the consumer price index: the cost of money itself.

As a result, the inflation measure may understate the pain that many Americans feel when rising interest rates make it more expensive to buy a house, get a car loan or carry a balance on their credit card.

That's the argument former Treasury Secretary Larry Summers makes in a new working paper titled, The Cost of Money is Part of the Cost of Living.

https://www.npr.org/2024/02/28/123455496...ry-summers

PAIN POINT

(03-12-2024 10:34 AM)Eagleaidaholic Wrote:  I was waiting for Tom to post this. Must be busy. Never in our history has the FED stated they will drop rates in the coming year until last year.

Just a coincidence I am sure.

Well, that is not entirely true. Their Dot plots are considered indicators/projections for them many times. It leaves room for plausible deniability as they don't come out and SAY the actual words.

Fed is trying to thread the needle so that we can have a soft landing. Seems clear to me they do not want to go to Paul Volcker levels of fighting inflation so as to insulate the sitting president. I thought they were going to get what they wanted and they got close - around 3% vs the 2% target - but if this rise in inflation persists then rates will have to be increased and there is no doubt we'll get a recession. Ultimately recessions are what truly fights inflation - along with productivity gains thru innovation. AI adoption will likely result in productivity gains that will put downward pressure on inflation - but that will be competing with the other upward pressures the gov't has been putting on the economy with the EV subsidies and rules against ICE vehicles.