11mo ago

Annual US inflation falls to 3-year low, clearing the way for the Fed to begin cutting rates

Year-over-year inflation reached its lowest level in more than three years in July, the latest sign that the worst price spike in four decades is fading and setting up the Federal Reserve for an interest rate cut in September.

29 comments

Which of course does absolutely jack shit for the price increases that have already occurred. Low inflation is not deflation.
- Take that further and you get the joke that was that AP article:
  .1% less inflation still is 2.9% inflation on top of what we still have. Year over year. Good news right?!
- I look forward to population decline in some countries. Deflation will happen then.
  
  It's already occurring. Japan is imploding and it has been a forward indicator for our economy since about the 90s.
- This person gets it.
Mean while normal people can't afford food.
- Don't worry they removed that cost metric from the CPI. That and any other metric that might actually be inflationary 😅. Don't you feel better though? 2.9% !
  
  CPI inflation is reported higher than 'all items' though...
  Grocery is seeing lower inflation. Seems to have come back down to earth.
  We need wage growth to continue to outpace inflation like it has been for the past year or so.
  
  Multiply that by 3 or 4 and you might get close to a real number.
- Say thank you that they allow you to get 14oz of goyslop at only 30% surcharge
Rates need to tick up a bit higher even.
- Then how do hedge funds get the free money to gamble with since apparently that's what the world economy is built on.
  
  They still can borrow, but they need to actually do some level of due diligence that what they throw money at can actually succeed.
  
  They abuse the market mechanics. Same as banks. This is why the carry trade is so levered up. Our borrowing rate here is far higher than in Japan so they are backing Japanese borrowing with US assets for additional leverage and then loaning to us investors against that capital. It's a clusterfuck.
- The economy is important. Rates will go lower to protect that.
  Central banks I think need to consider a higher neutral rate. Interest rates were too low for too long to try and move GDP growth. In retrospect not a great policy, as it led to a decade or so of inflation in stocks markets and housing.
  Why do anything of value if I can just leverage at low rates and dump borrowed money into stocks and real estate?
  Central banks tend to be arms reach from government, but maybe they should be doing less and the government more.
  GDP growth low? Invest in infrastructure and research. High inflation? Increase taxes.
  
  The economy is doing ok though, inflation is still up. Wallstreet wants lower rates, but listening to them got us extended 0% that ultimately was bad for the economy.
  Interest rates going up and forcing over leveraged companies into bankruptcy is also good for the economy.
  
  The whole point of the government not doing anything is that only the central bank can solve inflation through rate hikes.
  This ensures further wealth concentration, if the government wasn't lame, more equitable and sane outcomes would be possible.
The AP clearly has no idea how to read charts or infer data. The rate cuts aren't coming. CPI is still over or target rate of 2% YoY... and we are down a massive (checks notes) .1% from 3% after they mutilated the calculations to get the 3%
It's not moving. Sticky inflation. Stagnant. Stag-flation if you prefer.
Edit: I seem to have offended some AP writers.
- Corporate propaganda demands lower interest rates, peasant.
  
  Apparently beatings will continue until the propaganda is consumed 😂
Good job Biden!

29 comments