Earlier quoted context omitted.
Polymarket puts a cut at 98% likely currently: https://polymarket.com/event/fed-decision-in-september?tid=1...
Wow. Let me buy no Change.
Unemployment pretty much guarantees the cut. Inflation is in the backseat.
CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up
71–80 of 121 posts
Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up
#72Earlier quoted context omitted.
My naive expectation was: - Rents would go down because deportation of illegals will reduce demand - Prices of goods would skyrocket because of tariffs But instead, rents went way up. Could this be driven by the push to return to the office?
The "deportation of illegals" cannot reduce rents unless you think that undocumented workers are competing with Americans to pay $3k/mo rents in major cities, instead of living in RVs or cramming into small rooms. It can increase rents because immigrants build houses and do mental jobs like cleaning. > Could this be driven by the push to return to the office? A little. People still want to live in desirable areas for…
You cannot reduce rent period. Inflation is permanent typically, you can slow the rate of increase but prices don’t go back. Even massive building projects like the yimby’s lobby for can’t move the needle on housing costs according to economists who study the issue.
If you are a renter in Silicon Valley you are absolutely competing with non-citizens who are paying 3k for 1 and 2 bedroom apartments. That’s why so many locals who were born there are now homeless or have had to leave. I can tell you the streets and neighborhoods where it’s almost 100% new (non-legal and low skill) residents. The rents in those neighborhoods are very much in the 2000-3000 range. Section is likely a factor but I don’t know that non-fully legal residents get section 8. It certainly wouldn’t surprise me if they did.
Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up
#73FED is caught between a rock and a hard place, in a double bind. Because of jobs data, it will 100% cut interest rates in the next 2-3 FED meetings with inflation clearly showing an upwards trend. US could print money for over a decade because of China exporting deflation to it and the world, now that China is an enemy, it's up for a rude awakening. Monetary policies matter, the Dollar will suffer great debasement (i…
>The country will become industrialized for the wrong reasons -- by becoming poorer.
Trump is a populist. That is the goal. The elite will get hammered and the bottom will be pulled up. The country will be net poorer, but the bottom will be higher than it was before. At least that's how the plan is sold on paper.
Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up
#74Earlier quoted context omitted.
You concede that monthly inflation is volatile but then proceed to assume it is has grown uniformly and speculate that it will continue to grow uniformly? Umm...
The point is that the annual number is often rather confusing from a reporting perspective.
And that an annual number is diluted and will only feed in slowly over time.
If we knew inflation was permanently at 5% from now on, a blend with 2% for 11 months and 5% for 1 month, is not informative.
Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up
#75I got downvoted for asking this - but let me ask again:
The key driver for inflation seems to rents (technically listed as "shelter"). Shelter has a large weight in the CPI basket, and its 12-month increase was 3.6% (comparing to 2.9%).
Am I wrong here in reading the data? If I’m wrong please correct me. I assume the downvote is because I’m not correct.
Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up
#7612*0.4% is 4.8% Inflation is running at an annualised 4.8%. The 2.9% number is backward looking. Sure monthly inflation is more volatile, but the direction of travel is up, and that running average of 2.9% will be increasing slowly as it incorporates the recent higher prints. Edit: the seasonally adjusted change is 0.4% actually, with the monthly change 0.3%
Aren't you slightly undercounting? If inflation compounds, 0.4% inflation a month would be 1.004^12 = 4.9%.
Yes you're right
Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up
#77Interestingly treasury yields are down on this news, whereas on paper you would expect the opposite. Equities are up, on paper you would expect a toss-up (lower rate cut pushing down, inflation pushing up). Gold is down slightly. All this suggests these numbers, while being inflationary, are better then anticipated.
What is probably going on is the following:
- if inflation picks up again it will have to be controlled
- going by 1970s experience it may be that an engineered recession is required to bring inflation down
- recession fears is risk-off
- risk-off means go into bonds and out of stocks
But yeah, inflation is a double edged sword on bonds. To some extent higher inflation expectations should mean that yields on bonds should go up to provide a consistent real return.
Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up
#78Earlier quoted context omitted.
Musk was vocally against the increased federal spending.
And yet he did not meaningfully reduce government spending with DOGE at all. He did pilfer a copy of the SSA database, though.
I don't think that was his intention, or that he feigned anger at the outcome.
Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up
#79Earlier quoted context omitted.
> The US may import a lot of things... but probably not shelter. Housing requires construction materials, tools, and fixtures. Tariffs increase the cost of all of these, including domestically produced materials due to the second order effects.
>Housing requires construction materials ie wood
But house prices did not increase.
According to Redfin, the median home sale price was up 1.2% YoY in July 2025. [1]
Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up
#80100% odds the Fed cuts but inflation seems entrenched. Will the cut really help pull the labor market up? Tourism is down, AI is up, etc.
90% expected probability of a cut at the moment, down from 96% a week ago. A surprise no-cut would send a shock to the market IMO. https://www.cmegroup.com/markets/interest-rates/cme-fedwatch...
How these things are calculated is dumb:
The market implied rate (from swaps/forwards curves) for the following period is something like 27bps cut, so they say:
- 27 Is bigger than 25, so 0 cuts is 0%
- attribute 2/25bps likelihood to 50bps cut
- the remainder is left to 25bps cut
The reality is that there's a non-zero probability to unchanged, and a non-zero probability of 75bps+ cut etc etc. However this information would probably be in swaption prices and too complicated for anyone like the CME or media to make sense of. But at least with the way people talk about it they get to feel like they're making sense of the world.