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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

#81

Post by endisneigh »

Supermancho wrote: post #29
endisneigh wrote: post #24

Earlier quoted context omitted.

Sure it is, raising rates, e.g. 0.25 this time, 0.50 this time, etc results in increased likelihood of a recession. This is why the rate has been slowing down (e.g. 0.75 last time to a likely 0.50 this time) in order to have a soft landing.

>>> will the Fed stop raising rates soon enough? >> This is not a meaningful phrase > Sure it is, No, it is not. You meant some sort of recession, as if thats an undesired massive financial correction. This has been a long time coming and is better in the long run if the correction happens sooner than later. Good luck with whatever.

Ah - a doomer. Carry on then.

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

#82

Post by roywiggins »

lettergram wrote: post #67
NikolaNovak wrote: post #49

Earlier quoted context omitted.

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…

The real struggle is the government - fed, treasury, etc all claimed the inflation was “transitory”. A lot of people have been caught off guard. Aka people expected a deflation. I was pointing out most of the increase the last 3 years occurred in 2021. I actually believe 2022 has far higher inflation than they claim in government figures. At least locally, it’s higher based on my tracking. 2023 will be worse for food…

Inflation went up and then fell back down. It did involve more fed intervention than had been predicted! But it did come down.

That seems to qualify as "transitory" inflation to me, as opposed to persistent inflation that doesn't abate.

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

#83

Post by UncleMeat »

jollyllama wrote: post #72
UncleMeat wrote: post #62

Earlier quoted context omitted.

That's just more cherry picking. The appropriate thing to do is to create a collection of food items that represent some sort of average of the population expenses and measure that. And when they do this, they compute that food-at-home rose 0.2% in December (2.4% annualized).

Two thirds of adults in the US are overweight or obese. You don't want to eat the average basket of goods they're eating.

So? The federal reserve would have to have a very different mandate for it to make policy based off of a basket optimized for public health. I'm sorry that your personal food prices are higher. I just don't see why it matters at scale.

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

#84

Post by homeland221 »

ceejayoz wrote: post #63
antisthenes wrote: post #60

Earlier quoted context omitted.

At some point it stop being cherry picking and becomes an actual measure. The official BLS numbers are underreporting inflation. Overall, groceries are up roughly 35-50% since 2020, while the official numbers would have you believe the inflation was 18.17% over 3 years. BLS does a lot of trickery to generate favorable numbers. There are "quality" adjustments, there are "core" inflation indicators, which exclude goods…

Sigh. "My personal number is higher" isn't a good way to contest a national, fairly rigorous process run by professionals. I can pick a basket of goods from my local Wegmans that's gone up 100%; I don't doubt it's higher than the CPI number for some people. That's how averages work; there'll be some people for which it's lower , too, and their anecdotes have equally little value for national policy decisions. Lumber,…

You want to talk about professionals? Why not Shadowstat? The person who is doing the national calculation is not pro. They are bureaucrats subject to political adjustments. I have friends in six states everyone of them tallying their monthly expenses which increased more than 30%+ compared sametime last year. If yours didnt either you have significantly cut down your expense or oddly expensing very different to many others. The CPI is grossly not reflecting the reality.

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

#85

Post by lotsofpulp »

dragonwriter wrote: post #66

Note this is CPI, which is not the measure the Fed uses for gauging inflation. The Fed uses PCE. It is likely to behave similarly to CPI, though part of the reason the Fed has been as aggressive as long as it has is that PCE diverged more than is historically common from CPI during the inflation spike, spiking higher and coming down more slowly..

For context:

https://en.wikipedia.org/wiki/Personal_consumption_expenditu...

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

#86

Post by UncleMeat »

jollyllama wrote: post #76
lotsofpulp wrote: post #40

Earlier quoted context omitted.

https://www.agalert.com/california-ag-news/archives/november... https://www.sfgate.com/food/article/salinas-crop-disease-aff... https://www.ksbw.com/article/pathogens-destroying-salinas-va...

Interesting. At what point do we conclude we have systemic issues with our agriculture?

It is complicated. Raw leafy greens are now a major disease vector since they can come into contact with animal waste during processing and the safety of animal protein has improved dramatically over the past few generations. This leads to sudden "oh fuck, destroy the entire crop" situations that spike prices. That's bad.

But... there is no question that industrialized agriculture keeps the price of lettuce lower on average than non-industrialized approaches. If you are just watching prices, the trade is still positive.

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

#87

Post by ceejayoz »

homeland221 wrote: post #84
ceejayoz wrote: post #63

Earlier quoted context omitted.

Sigh. "My personal number is higher" isn't a good way to contest a national, fairly rigorous process run by professionals. I can pick a basket of goods from my local Wegmans that's gone up 100%; I don't doubt it's higher than the CPI number for some people. That's how averages work; there'll be some people for which it's lower , too, and their anecdotes have equally little value for national policy decisions. Lumber,…

You want to talk about professionals? Why not Shadowstat? The person who is doing the national calculation is not pro. They are bureaucrats subject to political adjustments. I have friends in six states everyone of them tallying their monthly expenses which increased more than 30%+ compared sametime last year. If yours didnt either you have significantly cut down your expense or oddly expensing very different to many…

> The person who is doing the national calculation is not pro.

It's not one person, and I can assure you the Bureau of Labor Statistics employs a wide range of professionals.

> I have friends in six states everyone of them tallying their monthly expenses

Cool. Anecdote coupled with strong selection bias.

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

#88

Post by starkd »

markus_zhang wrote: post #77
pwinnski wrote: post #58

Earlier quoted context omitted.

Mostly people arguing that the numbers are "wrong" are misunderstanding what low inflation means. Low inflation means prices won't continue to rise. It does not mean that prices will come down. The prices you remember from two years ago, they're gone. They're not even considered when calculating inflation numbers now.

True, but price fluctuations are still "individual" things, when we consider the cost. The CPI is at best a very vague/inaccurate number for personal financial planning. Looking at one's bills are far more useful.

Nobody was claiming CPI was for looking at personal financial planning. It is about the larger economy that in turn effects individuals.

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

#89

Post by starkd »

rank0 wrote: post #47

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.

The fact you are getting downvoted is simply amazing to me. It shows people are just not ready to look at reality of budgeting. People are honestly under the illusion that debt is just a number and can never get too high. Nothing is forever.

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

#90

Post by tarboreus »

UncleMeat wrote: post #83
jollyllama wrote: post #72

Earlier quoted context omitted.

Two thirds of adults in the US are overweight or obese. You don't want to eat the average basket of goods they're eating.

So? The federal reserve would have to have a very different mandate for it to make policy based off of a basket optimized for public health. I'm sorry that your personal food prices are higher. I just don't see why it matters at scale.

Great, the price of ramen noodles and curved screen TVs is stable. Thanks, Fed, time to set interest rates at -1% for the next ten years of whacky growth.
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