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

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

#91

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.

Okay, but the experience of the average American is what actually matters when tallying inflation. It's not about what people "should" be spending money on, it's about what people actually spend money on.

Surely putting together an inflation index consciously designed not to replicate an average American diet would be a much, much worse measure of food inflation than one that does actually try to model the average American's situation? "Everyone should be going paleo so the index shouldn't have bread in it" is a self-evidently bad idea, that's not a statistician's job. A single inflation number is hardly ever going to be a correct measurement of any single person's experience of inflation, but that's inevitable.

There are real criticisms to make, such as the average basket of goods not characterizing the inflation felt by the poorest, because they spend money on different things than people with a bit more money.

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

#92

Earlier quoted context omitted.

> will the Fed stop raising rates soon enough? This is not a meaningful phrase.

Why not? It's entirely possible to overcorrect. https://www.reuters.com/markets/us/feds-delayed-inflation-fi...

It's also possible some teenagers who stole a car for a joyride might drive too slowly. Wouldn't bet on it, though.

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

#93
post #54

Earlier quoted context omitted.

Ha. Our natural gas bills in my area doubled this month.

No fun for you, but nationwide piped gas went up 3%, not 100%. Your cost per unit (not overall gas bill) doubled in december? What gas provider do you have?

SoCal Gas company. They sent out notifications to everyone warning about the coming price hikes.

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

#94

Earlier quoted context omitted.

Why not? It's entirely possible to overcorrect. https://www.reuters.com/markets/us/feds-delayed-inflation-fi...

It's also possible some teenagers who stole a car for a joyride might drive too slowly. Wouldn't bet on it, though.

https://www.politico.com/news/2022/03/29/federal-reserve-rec...

> Nine times since 1961, the central bank has embarked on a series of interest rate increases to rein in inflation. Eight times a recession followed. The only true “soft landing” — as significant rate hikes with no subsequent slumps are called — occurred in 1994, according to a March 25 report by investment bank Piper Sandler. Not a sterling track record.

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

#95

Earlier quoted context omitted.

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.

[deleted]

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

#96

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.

Okay, but the experience of the average American is what actually matters when tallying inflation. It's not about what people "should" be spending money on, it's about what people actually spend money on. Surely putting together an inflation index consciously designed not to replicate an average American diet would be a much, much worse measure of food inflation than one that does actually try to model the average Am…

Ok, since you strawmanned me against bread (which has also increased significantly, at least 5% YOY) , let's consider this: if nobody could afford anything but Doritos, and the price of Doritos went from $4 to $3, then the average basket of goods would go decrease in price >20%. It's a great model if you want to hide the deteriorating quality of life behind effectively meaningless stats. What I don't understand is why so many people feel compelled to defend it so vigorously.

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

#97

Earlier quoted context omitted.

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.

That's 12 eggs a week. So if the price of a dozen eggs has gone from $2 to $5 you are out... $150 a year. And that's for a sizable outlier in egg consumption. It isn't hard to see how this doesn't push overall inflation very meaningfully. Most store-bought dried pasta has zero egg in it. An entire homemade cake has like three eggs in it. So the price of an entire cake is up less than a dollar. How many cakes does the…

You received the incorrect message from my post

- Cleanest (High Protein, Low fat)

- Cheapest (Cheaper than pork and chicken per g of protein)

- An important ingredient (as a lectin) in many baked goods

You then turn this into an absolute number for 1. But your absolute number of a $150/person/year would certainly approach 10% of my annual grocery spend... which lines up. Your absolute number would be frightening for a family of 4 making the median income.

Inflation is not personally affecting me negatively - for the record, I think it's a reversion to the mean and 10 years of fed targets finally being achieved.

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

#98

Earlier quoted context omitted.

Eggs are significant ingredient in many homemade things (eggs, bread, pancakes, pastas, brownies) and one of the cheapest,cleanest protein sources in the American diet. The Aivian flu + inflation caused a carton of 18 eggs to increase in price more than 50% recently ( $7.50). My household has fought this increase by increasing mushrooms and spinach in our eggs, and recently hybridizing with liquid egg whites.

> Eggs are significant ingredient in many homemade things (eggs, bread, pancakes, pastas, brownies) and one of the cheapest,cleanest protein sources in the American diet. Yes, and food makes up ~13% of the BLS CPI. This is taken into account when they do their surveys to see what people are spending their money on: * https://en.wikipedia.org/wiki/Consumer_Expenditure_Survey Remember that the CPI is the national avera…

I'm not questioning the survey results, I am challenging the lack of importance of eggs.

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

#99

Earlier quoted context omitted.

Okay, but the experience of the average American is what actually matters when tallying inflation. It's not about what people "should" be spending money on, it's about what people actually spend money on. Surely putting together an inflation index consciously designed not to replicate an average American diet would be a much, much worse measure of food inflation than one that does actually try to model the average Am…

Ok, since you strawmanned me against bread (which has also increased significantly, at least 5% YOY) , let's consider this: if nobody could afford anything but Doritos, and the price of Doritos went from $4 to $3, then the average basket of goods would go decrease in price >20%. It's a great model if you want to hide the deteriorating quality of life behind effectively meaningless stats. What I don't understand is wh…

It just seems like people have extremely high expectations for what a single number could possibly encompass. It's a single, summary statistic- it's not going to ever be anything more than that. Of course low inflation doesn't mean everything's perfect and prices are just fine. It doesn't say anything about how poor or rich people are, what they can afford, or how wealth is distributed in society.

It is just an (imperfect!) aggregate measure of prices, and it certainly seems to capture something- inflation was low for a long time, then COVID, then it got high, then rates went up, then it went down again. When inflation is very high there aren't many inflation truthers going around insisting that actually, inflation is low; when inflation falls or stays low, there's always people insisting that actually not everything is great. Which: yes! You can have low inflation and all sorts of problems! But having those problems and high inflation is worse.

It's not hiding anything, it's just not rich enough to capture everything you're interested in.

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

#100

Earlier quoted context omitted.

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.

Low inflation doesn't mean everything is fine, it just means that you don't have exponentially inflating prices on top of whatever other problems you've got.
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