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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

#41

Post by markus_zhang »

ryhn22 wrote: post #36
markus_zhang wrote: post #31

To me the data is more or less meaningless. I keep a notebook of my own inflation record for food and fuel.

Can you add something to the discussion by either sharing what your records show for you personally or addressing why a large/broad dataset is "meaningless" in the face of your smaller dataset?

It's meaningless because every individual follows his or her own life. For example, getting a new house might increase your rent while the "average" rent drops.

What I'm trying to say is, unless for investment or research, these data doesn't have much to do with we as individuals. You can see people arguing that "You all feel X goes up but I don't feel that", and I'm just saying the same thing but from a different perspective.

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

#42

Post by cpursley »

alexb_ wrote: post #10

>The data, when paired with prior months’ lower-than-expected readings, point to more consistent signs that inflation is easing and may pave the way for the Fed to downshift to a quarter-point hike at their next meeting ending Feb. 1. I hope not. There's an absurd amount of dumb money floating around, and YoY inflation is still at 6.5%. Higher interest rates are going to force companies and investors to actually post…

I tend to agree.

And in the housing market as well. All sorts of silly things have happened with home prices due to all the cheap money.

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

#43

Post by UncleMeat »

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.

Eggs are way up. Fortunately, the government takes a blend of different products and presents the overall price change. If we made policy off the whims of onion prices, for example, we'd be in for a wild ride.

Every month for the last six months has produced the same comment. Overall inflation is low so somebody picks out a specific thing that went up a lot and implies that the government numbers are either misleading or lies. Interestingly, it is a different chosen product each month.

Egg prices are also being driven largely by disease and culling and don't really represent something that should be attacked with monetary policy.

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

#45

Post by smileysteve »

rsynnott wrote: post #30
jollyllama wrote: post #16

Earlier quoted context omitted.

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

If the only thing you eat is eggs, then you're a weird edge-case not accounted for in the standard inflation figures, of course.

Eggs are one of the cheapest and cleanest proteins; They're also used extensively in baking from breads, brownies, cakes, and pastas.

I eat 3 eggs a day for breakfast, 4+ days a week for the last 25 years.

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

#46

Post by ceejayoz »

jollyllama wrote: post #27
ceejayoz wrote: post #20

Earlier quoted context omitted.

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...)

I'm not cherry picking. Produce is up massively. Heads of broccoli, lettuce, are up at least 20% over the last year! And that's IF you can find them.

That's further cherry-picking (and I've never been unable to purchase either; we eat brocolli 3-4x a week).

The comment you replied to has the non-cherry-picked number for this month's report: "Food at home +0.2%"

Some things went up more than others, some recovered faster, and without deflation the prices will remain overall higher than they were a year ago.

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

#47

Post by rank0 »

Cash is trash. It’s headed toward zero in the long run.

They’ve barely unwound any of the Feds balance sheet. I think it’s ridiculous for the markets to assume the fight is over and position for a pivot.

Imagine what would happen if the fed started selling $100B+ in treasuries per month. EVENTUALLY we’re gonna have to address that plus our enormous congressional deficit.

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

#48

Post by UncleMeat »

euix wrote: post #11
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 do…

Monthly inflation in December was -0.1%.

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

#49

Post by NikolaNovak »

roywiggins wrote: post #23
lettergram wrote: post #15

Earlier quoted context omitted.

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 bec…

> much of the increase occurred in 2021 - it just never came down. That's not actually in disagreement with the notion that inflation has come down a lot. (for prices to come down you'd need deflation)

This is a key point and massive misunderstanding in everybody I know : there's this expectation that when "inflation slows down", then "prices will return to normal". But that's empathically not what it means.

If prices rose whatever percent last 18 months, and inflation drops to zero tomorrow... Prices will stay exactly the same. They just won't increase further day to day any more (at zero inflation).

"Inflation is still high, I know that because prices are still up compared to before " is a logical error.

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

#50

Post by hammock »

alexb_ wrote: post #10

>The data, when paired with prior months’ lower-than-expected readings, point to more consistent signs that inflation is easing and may pave the way for the Fed to downshift to a quarter-point hike at their next meeting ending Feb. 1. I hope not. There's an absurd amount of dumb money floating around, and YoY inflation is still at 6.5%. Higher interest rates are going to force companies and investors to actually post…

Headline and Core CPI printed 'as expected' however Services CPI soared to the highest in 40 years, real wages shrank for the 21st month in a row and housing costs continue to soar
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