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U.S. inflation cools again, giving Fed room to downshift on rates

bloomberg.com

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Re: U.S. inflation cools again, giving Fed room to downshift on rates

#11

Post by euix »

GalenErso wrote: post #7

The Fed can't lower rates if only because it needs to maintain its credibility. The financial press has been cranking out opinion pieces disguised as serious analysis nonstop in an attempt to wish a change of monetary policy into being. If the Fed backs down anytime soon, it could decrease the effectiveness of future increases. The next time the Fed raises rates, consumers, asset holders and businesses can just tell…

Also unless the inflation rate goes negative, the actual price of goods is not going down, it's just increasing slower because you had a whole years worth of high inflation. If YoY inflation goes down that just means last year's inflation was already so high, relative to this year we are "only" increasing by 3% or 4%, etc.

In that sense the inflation is now baked in, and we only make future increases slower but we don't unwind back to the original price without some serious deflation.

Re: U.S. inflation cools again, giving Fed room to downshift on rates

#12

Post by endisneigh »

ethanbond wrote: post #9
endisneigh wrote: post #5

not surprising. now that the covid related spike is far enough in the past I expect inflation to be down drastically since the throttle that was low rates is no longer being pressed on. question is, will the Fed stop raising rates soon enough?

YoY is comparing Jan 2021 to Jan 2022. What’s the reset?

Inflation spiked and is going down. The nature of YoY changes is such that even if prices stayed the same (not inflation, which is inherently 2nd order) inflation will go down. Hence, the reset. If you consider COVID an anomaly, which it is, this is the natural conclusion, which we're now seeing.

in any case, I adjusted the comment to clarify

Re: U.S. inflation cools again, giving Fed room to downshift on rates

#13

Post by newaccount2021 »

GalenErso wrote: post #7

The Fed can't lower rates if only because it needs to maintain its credibility. The financial press has been cranking out opinion pieces disguised as serious analysis nonstop in an attempt to wish a change of monetary policy into being. If the Fed backs down anytime soon, it could decrease the effectiveness of future increases. The next time the Fed raises rates, consumers, asset holders and businesses can just tell…

[dead]

Re: U.S. inflation cools again, giving Fed room to downshift on rates

#15

Post by lettergram »

shmatt wrote: post #6
jollyllama wrote: post #3

>Excluding food and energy

* Food at home +0.2%, smallest since March 2021 * Fuel oil -16.6%, biggest decline since February 1990 Seems important to point out to anyone reading your comment

1. There are things like “shrink-flation” not captured. I’ve noticed most packaged goods have reduced in size 10-20%. Eggs have more than doubled, milk is up 25%, etc

I don’t care what the government publishes. My friends around the country all confirm this. My own bills (I track itemized) show it as well. Though, to your point, much of the increase occurred in 2021 - it just never came down.

2. Fuel is only down because the US has used its strategic reserve to increase supply. At the same time demand dropped dramatically, with China lockdowns & increased prices forcing manufacturing / transportation to cease. Now the election season is over I suspect the strategic reserve will stop being drained; further if price caps work on Russia… we will see a massive reduction in the global fuel supply (Russia will just stop pumping as its unprofitable).

Re: U.S. inflation cools again, giving Fed room to downshift on rates

#16

Post by jollyllama »

shmatt wrote: post #6
jollyllama wrote: post #3

>Excluding food and energy

* Food at home +0.2%, smallest since March 2021 * Fuel oil -16.6%, biggest decline since February 1990 Seems important to point out to anyone reading your comment

Get real. Have you bought eggs or butter lately? Random shoppers are literally exclaiming about the price of butter in the store.

Re: U.S. inflation cools again, giving Fed room to downshift on rates

#18

Post by penjelly »

jollyllama wrote: post #16
shmatt wrote: post #6

Earlier quoted context omitted.

* Food at home +0.2%, smallest since March 2021 * Fuel oil -16.6%, biggest decline since February 1990 Seems important to point out to anyone reading your comment

Get real. Have you bought eggs or butter lately? Random shoppers are literally exclaiming about the price of butter in the store.

isnt his point that the price of groceries has recently only grown a small amount? compared to previous months or quarters which have grown quite a bit

Re: U.S. inflation cools again, giving Fed room to downshift on rates

#19

Post by Supermancho »

endisneigh wrote: post #5

not surprising. now that the covid related spike is far enough in the past I expect inflation to be down drastically since the throttle that was low rates is no longer being pressed on. question is, will the Fed stop raising rates soon enough?

> will the Fed stop raising rates soon enough?

This is not a meaningful phrase.

Re: U.S. inflation cools again, giving Fed room to downshift on rates

#20

Post by ceejayoz »

jollyllama wrote: post #16
shmatt wrote: post #6

Earlier quoted context omitted.

* Food at home +0.2%, smallest since March 2021 * Fuel oil -16.6%, biggest decline since February 1990 Seems important to point out to anyone reading your comment

Get real. Have you bought eggs or butter lately? Random shoppers are literally exclaiming about the price of butter in the store.

Sure, you can cherry-pick individual items to tell pretty much any story you like.

If the 60% increase in butter prices over the last year is hitting your budget, you probably would benefit from eating less butter. (And I say this as someone who eats a good amount of butter...)

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