Headline CPI came in at -0.7% in June:
Now can we please cut interest rates? It sure seems like inflation is well under control. Maybe too much under control?
In conventional year-over-year terms, headline inflation in June clocked in at 3.0% and core inflation was 3.3%.
target is 1-3%, which innumerate lamestream journos took to mean 2%, in the name of always finding the middle.
so, trump sub jerry powell has the cover to keep rates where they are.
Well but when Real President Trump was in office it was BETTER cuz, um ... cuz it WAS!!
I see the stock market has collapsed, just like TFG said it would if Biden was elected.
[mournful music plays] "It's the worst economy ever, folks. The worst in our history, worse than we've ever seen. It's a disaster. The cities are a disaster, families are going bankrupt, people can't even afford to eat, can you believe that? Can't even afford to eat. It's a disaster, a total disaster..."
And the cultists just eat it up, and curse the Democrats and their welfare. And if (dog forbid) the Republicans take power and destroy the ACA and eviscerate Medicare and Social Security and spike inflation with tariffs, they'll still curse Democrats and their welfare.
See also Davis X Machina on sparrows and curtain rods, or Lyndon Johnson on emptying one's pockets.
I've pushed back hard against your monetary policy views the last 2.5 years, but I agree with you now!
It seems like everyone thinks a rate cute is off the table for the meeting at the end of this month, but I don't think it should be.
Core CPI inflation in Q2 was 2.1% (annualized, natch). That's the lowest quarter we've seen since 2021 Q1.
Declaring victory might be a bit premature, but we can at least start easing off the break, no?
The ingredients are all there. This rate cut has been anticipated for a long time, and has only been delayed by early 2024's unexpected hitch in inflation.
Considering that overall inflation is at target and given that the shelter component is on a long lag, its likely that actual current inflation is below target.....if we cant declare victory now, when would we?
The inflation battle was won many, many months ago.
You and I feel differently about this. I'm choosing to focus on our area of agreement - the Fed should start cutting!
when to declare victory?
when trump is president.
no, because it’s not actually about inflation. they want unemployment back at 5%. the workers must be put in their place.
JOE RULES HERE...not little bittsy trump...Kitties know
I agree, the punishment must continue, it's all they know.
this seems true
I think as mentioned up thread, it's not just inflation. Unemployment factors in as well, and I think sales volume. The low interest rates prop up unsustainable pricing. Prices are starting to come down in housing, I don't track on vehicles but I'd be not surprised if there as well.
in other economic news the price per metric crap ton of maga bullshit is down 90% yoy and inventories are at an all-time high
We need a .25 cut in August
All special prosecutors are Republicans.
All FBI directors are Republicans.
The Fed only cuts rates when a Republican is in the White House.
Or... can reporters at least stop saying that "inflation is high"?
I think we better wait until Larry Summers signals the all clear.
Will that be a puff of white smoke from his chimney?
that's not smoke.
it's his degraded 69 year old batch.
Well the markets were up earlier, indices up by 1%, after the news of low inflation...then bombed later, e.g. nasdaq down ca. 2%
waffling between bad news is good news--or just bad,,,
Trump will be president in 6 months. Why do you want to help him? First Mr. Drum wants to dump Biden, now he wants to goose the economy for Trump next year! Next thing you know, he’ll be throwing Ukraine to the Russian Bear.
Trump has his hit squads ready to rock.
https://www.cnn.com/2024/07/11/politics/us-germany-foiled-russian-assassination-plot/index.html
Or… see what Biden got us into? Pick your poison.
For more than six months, Russia has been carrying out a sabotage campaign across Europe, largely by proxy. It has recruited local amateurs for everything from arson attacks on warehouses linked to arms for Ukraine to petty acts of vandalism — all designed to stymie the flow of weapons from the West to Ukraine and blunt public support for Kyiv.
But the intelligence suggesting that Russia was willing to assassinate private citizens underlined to Western officials just how far Moscow was willing to go in a parallel shadow war it is waging across the west.
The last time I heard the "neutral" interest rate, neither stimulative nor depressive, is inflation plus about 3%. It appears that we are very near that neutral rate right now; given the very healthy state of the economy I would suggest that stimulative rates are not called for, so perhaps the best idea would be to leave interest rates where they are until either the economy tips into recession or shows signs of overheating..
Often, we are many months into a recession before it is realized. Waiting to reduce rates until we are many months into a recession is easier, but probably not the best approach.
On the other hand, economic stimulation because it is feared that a recession might be on the horizon is probably not the best approach either.