patrick.net

When I mean inflation needs to rise, not talking about 1923 Germany

You think it's ok to keep real interest rates negative seven years after the crisis?

tr6 says

You think it's ok to keep real interest rates negative seven years after the crisis?

I don't believe it's a real choice the Fed has as long as inflation is low.

I am not in the MMT or Larry Summers Camp that would probably only hike rates if Core CPI was 4%-5%

However, 2.25% -2.50% would have been my choice for the rate hike, 2% core was their starting point.

Velocity activity is limited due to demographics, I believe the counter would more painful

We don't have a break away economy and the over investment thesis was in oil which had started some time again.

For now, acceptable... But if core picks up with ECI wage inflation that's a different story

Let's say you are a pension fund (Calpers) with 7.5% assumed investment return. 30 year is at 2.6%, and that's half of your portfolio. Do you think equities can deliver 12.5% annualized return for the next 30 years in the economy that's growing less than 4% nominally? All I am saying is that negative real rates have consequences.

Logan Mohtashami says

Fed Rate Hikes Need More Inflation

Lower crude prices will make it hard to raise inflation.
Higher minimum wages will make it easy to raise inflation.

Logan Mohtashami says

We don't have a break away economy and the over investment thesis was in oil which had started some time again.

Economy is very regional. It's overheated in bay area. It's dying in oil states such as North Dakota and Wyoming (it's worse than 2008). Bay area needed positive real interest rates in 2013.

tr6 says

All I am saying is that negative real rates have consequences.

That is a valid concern for pensions funds. I am going to UCLA Anderson Conference at the end of this month and I remember speaking to the Calpers investor speaker back in 2013 and the hunt for yield was getting more and more difficult, that was before negative rates too.

However, the bigger variable factor is always the need of the many... Can't raise against inflation for better yield returns or for Banks to make better profits, however a valid thesis non the less

Strategist says

Lower crude prices will make it hard to raise inflation

Headline will look a lot different next year, but as always they only think about core, core had been picking up.

Speaking of Inflation old man, heading out to the new whole foods to pick up dinner, that's a legit inflation thesis

Logan Mohtashami says

Speaking of Inflation old man, heading out to the new whole foods to pick up dinner, that's a legit inflation thesis

Don't forget the salad.

Logan Mohtashami says

Speaking of Inflation old man, heading out to the new whole foods to pick up dinner, that's a legit inflation thesis

I feel like Whole Foods has had a lot of good deals lately. Just don't buy $30 a pound cheese.