The BLS released its July CPI numbers today, and they're down a smidge from last month:
On a month-over-month basis, headline CPI is at 2.0% and core CPI is at 1.9%. On a trend basis, headline CPI is at zero.
This is two months in a row that core CPI has been below the Fed's target of 2%. I'm really not sure what more they want to see before they stop raising interest rates.
A Republican in the Whitehouse.
the working class crushed.
cmon everybody! what does the fed want to see?
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Orthodoxy requires that unemployment skyrocket so that they can go back to their cozy Phillips Curve and stop having to take responsibility for making actual decisions.
I'm really not sure what more they want to see before they stop raising interest rates.
A recession.
I don't know how to reconcile this news:
The consumer price index rose 3.2% from a year ago in July, slightly below expectations. The core CPI ran at a 12-month rate of 4.7%, also below the estimate. Both measures were up 0.2% on the month.
With Kevin's:
On a month-over-month basis, headline CPI is at 2.0% and core CPI is at 1.9%. On a trend basis, headline CPI is at zero.
Is Kevin's "month-over-month basis" a measure of the price change from June to July? And if so, is 2% something to celebrate?
His is M/M, but annualized. IOW, take the M/M number, then adjust it as if we had 12 straight months of that M/M inflation rate = annualized rate.
Thanks. Now I understand Kevin's:
"This is two months in a row that core CPI has been below the Fed's target of 2%. I'm really not sure what more they want to see before they stop raising interest rates."
The Fed might want to see more than two months data before changing their inflation outlook. And look at the chart! There are 6 months, from December to May where CPI was 4.5% or more. That's not good. What did he have to say back then? I found a post from April ("Inflation ticks down in March") where he writes:
"Core inflation is still stubbornly high, which BLS attributes largely to increases in the shelter index. This is fairly artificial, and should decrease substantially once their measure of shelter inflation catches up to the current day."
In todays BLS report, we read:
"The shelter index was the largest factor in the monthly increase in the index for all items less food and energy." [i.e. Core CPI]
Kevin should explain what he means by "catching up to the current day", which strikes me as wishful thinking, like "just around the corner". That kind of language doesn't belong in serious analysis.
He means the "core" CPI's tracking of rents, which is the single-largest component of that index, lags the Zillow rents index.
The core CPI captures leases signed as much as a year ago, whereas Zillow rents index captures what the current going rate of rent is.
I'm really not sure what more they want to see before they stop raising interest rates.
I think they will not raise rates at their September meeting, if the PCE report later this month confirms the good inflation news.
“On a trend basis, headline CPI is at zero.”
This is silly.