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Inflation Beyond the Stars Thread for April 12
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2022 Apr 12, 12:49am 119,865 views 1,200 comments
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535
AD
2023 Nov 1, 4:56pm
AD
2023 Nov 1, 4:56pm
HeadSet says
Not so since there are signs the economy is slowing.
Beside the ISM's recent manufacturing report which shows a slowdown (and trucking industry in a major slump), this is another indicator of a slowing economy:
https://www.bloomberg.com/news/articles/2023-10-27/how-many-jobs-should-i-apply-to-candidates-aim-for-500-in-cooling-labor-market
,
ad says
Federal Reserve announced today it is not raising the Fed Funds rate this month.
Unfortunate.
Not so since there are signs the economy is slowing.
Beside the ISM's recent manufacturing report which shows a slowdown (and trucking industry in a major slump), this is another indicator of a slowing economy:
https://www.bloomberg.com/news/articles/2023-10-27/how-many-jobs-should-i-apply-to-candidates-aim-for-500-in-cooling-labor-market
,
537
Misc
2023 Nov 2, 5:56pm
I've been working out some. I can now carry over $200 groceries from the car to the kitchen in ONE trip.
538
AD
2023 Nov 3, 10:33am
AD
2023 Nov 3, 10:33am
"The US economy added 150,000 jobs in October 2023, undershooting the 180,000 reading expected, with auto industry strikes a factor, the Bureau of Labor Statistics said. The unemployment rate ticked higher to 3.9%." (source: Yahoo Finance)
I forecast CPI for October 2023 will be between 0.15% and 0.3% for last 30 days and 3.2% for last 12 months.
Service jobs market (from car washes to restaurants to hotels) is loosening in Panama City, Florida (compared to last few years).
.
I forecast CPI for October 2023 will be between 0.15% and 0.3% for last 30 days and 3.2% for last 12 months.
Service jobs market (from car washes to restaurants to hotels) is loosening in Panama City, Florida (compared to last few years).
.
539
AD
2023 Nov 3, 11:08am
AD
2023 Nov 3, 11:08am
Keeping the Fed Funds rate at 5.5% and at a 22 year high is enough to reduce inflation because of the Fed's quantitative tightening (QT).
I wonder if the Fed will continue QT when inflation reaches below 2% annually, or will it hold steady its balance sheet of federal government bonds and mortgage backed securities.
.
I wonder if the Fed will continue QT when inflation reaches below 2% annually, or will it hold steady its balance sheet of federal government bonds and mortgage backed securities.
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540
HeadSet
2023 Nov 3, 12:05pm
HeadSet
2023 Nov 3, 12:05pm
ad says
If the Fed "holds steady" that will mean when the low interest bonds mature the Fed must then sell the much higher rate bonds to keep up the balance sheet. Interesting to see if there is enough demand for new bonds without even higher rates.
I wonder if the Fed will continue QT when inflation reaches below 2% annually, or will it hold steady its balance sheet of federal government bonds
If the Fed "holds steady" that will mean when the low interest bonds mature the Fed must then sell the much higher rate bonds to keep up the balance sheet. Interesting to see if there is enough demand for new bonds without even higher rates.
541
AD
2023 Nov 3, 12:28pm
AD
2023 Nov 3, 12:28pm
Not a surprise as far as post pandemic economic news such as with the trucking industry: https://www.cnn.com/2023/11/03/business/maersk-layoffs-shipping-boom-bust/index.html
And this being reported yesterday on CNBC: Target CEO says shoppers are pulling back, even on groceries
That is why I see high probability that inflation will remain tamed and the Fed will not raise the Fed Funds rate anymore as it sits at 5.5% and at a 22 year high.
And this being reported yesterday on CNBC: Target CEO says shoppers are pulling back, even on groceries
That is why I see high probability that inflation will remain tamed and the Fed will not raise the Fed Funds rate anymore as it sits at 5.5% and at a 22 year high.
542
AD
2023 Nov 3, 1:05pm
AD
2023 Nov 3, 1:05pm
HeadSet says
I would expect they would just hold the bonds to expiration, even the longer term bonds. I am not sure what they hold as far as bonds with duration greater than 7 years. I meant hold steady as far as not sell any bonds (and not buy any replacement short duration bonds).
So their total assets will decrease as the short term bonds expire and not replaced with newer short term bonds.
.
If the Fed "holds steady" that will mean when the low interest bonds mature the Fed must then sell the much higher rate bonds to keep up the balance sheet. Interesting to see if there is enough demand for new bonds without even higher rates.
I would expect they would just hold the bonds to expiration, even the longer term bonds. I am not sure what they hold as far as bonds with duration greater than 7 years. I meant hold steady as far as not sell any bonds (and not buy any replacement short duration bonds).
So their total assets will decrease as the short term bonds expire and not replaced with newer short term bonds.
.
543
HeadSet
2023 Nov 3, 5:31pm
HeadSet
2023 Nov 3, 5:31pm
ad says
That would be the QT you mentioned, not holding steady.
So their total assets will decrease as the short term bonds expire and not replaced with newer short term bonds.
That would be the QT you mentioned, not holding steady.
545
AD
2023 Nov 4, 8:16am
AD
2023 Nov 4, 8:16am
HeadSet says
True, as the balance sheet would show a reduction in assets (or holdings of US Treasuries) as part of Quantitative Tightening.
I just hope the Fed does not lose a lot of money if they are selling US Treasuries before their expiration date.
https://www.axios.com/2023/10/11/us-treasury-bond-yields-china-federal-reserve
,
ad says
So their total assets will decrease as the short term bonds expire and not replaced with newer short term bonds.
That would be the QT you mentioned, not holding steady.
True, as the balance sheet would show a reduction in assets (or holdings of US Treasuries) as part of Quantitative Tightening.
I just hope the Fed does not lose a lot of money if they are selling US Treasuries before their expiration date.
https://www.axios.com/2023/10/11/us-treasury-bond-yields-china-federal-reserve
,
546
AD
2023 Nov 4, 8:21am
AD
2023 Nov 4, 8:21am
Booger says
Good point Booger, as I ask is it going to be the same Big Mac or are they going to reduce the size of the hamburger meat by 3% each year during the coin's acceptance period ?
Is the coin's acceptance period for a limited time such as 3 years after issuance ?
This is akin to a silver 25 cent coin maintaining its value as far as equivalence to a gallon of gasoline: https://patrick.net/post/1344893/2022-05-01-silver-dime-buys-gallon-of-gas
.
Good point Booger, as I ask is it going to be the same Big Mac or are they going to reduce the size of the hamburger meat by 3% each year during the coin's acceptance period ?
Is the coin's acceptance period for a limited time such as 3 years after issuance ?
This is akin to a silver 25 cent coin maintaining its value as far as equivalence to a gallon of gasoline: https://patrick.net/post/1344893/2022-05-01-silver-dime-buys-gallon-of-gas
.
547
AD
2023 Nov 4, 11:38am
AD
2023 Nov 4, 11:38am
Nonunion Toyota boosts hourly wages 9.2%, cuts progression time as UAW votes await
Toyota Motor North America told its nonunion production workers it was boosting hourly wages in its plants, distribution and logistics centers to $34.80 (a top wage level), effective Jan. 1, marking the third increase in less than a year.
Toyota Motor North America raised hourly wages for its U.S. manufacturing, distribution center and logistics employees yesterday for the third time this year, upping the top wage to $34.80 per hour, cutting the number of years to reach that wage, and boosting paid time off for all employees, a spokesman confirmed.
November 01, 2023 12:08 PM
Automotive News
https://www.autonews.com/manufacturing/toyota-boosts-hourly-pay-92-detroit-3-uaw-workers-wait-vote
Toyota Motor North America told its nonunion production workers it was boosting hourly wages in its plants, distribution and logistics centers to $34.80 (a top wage level), effective Jan. 1, marking the third increase in less than a year.
Toyota Motor North America raised hourly wages for its U.S. manufacturing, distribution center and logistics employees yesterday for the third time this year, upping the top wage to $34.80 per hour, cutting the number of years to reach that wage, and boosting paid time off for all employees, a spokesman confirmed.
November 01, 2023 12:08 PM
Automotive News
https://www.autonews.com/manufacturing/toyota-boosts-hourly-pay-92-detroit-3-uaw-workers-wait-vote
548
Booger
2023 Nov 4, 2:43pm
Booger
2023 Nov 4, 2:43pm
ad says
I suspect that they are doing what they are doing with MBS's in that they are really not selling, just not buying letting the value drop as people pay down / pay off / refinance their loans.
I just hope the Fed does not lose a lot of money if they are selling US Treasuries before their expiration date.
I suspect that they are doing what they are doing with MBS's in that they are really not selling, just not buying letting the value drop as people pay down / pay off / refinance their loans.
549
AD
2023 Nov 4, 2:47pm
AD
2023 Nov 4, 2:47pm
Booger says
True as far as the Fed reducing its assets by MBS's being paid down each month by the home owners, and not buying any more MBS.
.
ad says
I just hope the Fed does not lose a lot of money if they are selling US Treasuries before their expiration date.
I suspect that they are doing what they are doing with MBS's in that they are really not selling, just not buying letting the value drop as people pay down / pay off / refinance their loans.
True as far as the Fed reducing its assets by MBS's being paid down each month by the home owners, and not buying any more MBS.
.
554
AD
2023 Nov 11, 4:54pm
AD
2023 Nov 11, 4:54pm
.
https://markets.businessinsider.com/news/stocks/us-economic-outlook-recession-markets-wall-street-stocks-interest-rates-2023-11
'The hard part is over': Here's what Goldman Sachs sees in the year ahead as markets and the economy return to pre-2008 conditions
Goldman Sachs said the economy and investing landscape is returning to a pre-2008 environment.
Strategists said the global economy has outperformed expectations in 2023, and disinflation should carry on.
Conditions are normalizing as the era of ultra-low rates ends.
https://markets.businessinsider.com/news/stocks/us-economic-outlook-recession-markets-wall-street-stocks-interest-rates-2023-11
'The hard part is over': Here's what Goldman Sachs sees in the year ahead as markets and the economy return to pre-2008 conditions
Goldman Sachs said the economy and investing landscape is returning to a pre-2008 environment.
Strategists said the global economy has outperformed expectations in 2023, and disinflation should carry on.
Conditions are normalizing as the era of ultra-low rates ends.
555
AD
2023 Nov 11, 5:38pm
AD
2023 Nov 11, 5:38pm
.
Wolfman at WolfStreet website mentions about all the liquidity from the pandemic with ZIRP (zero interest rate policy) and all the stimulus spending. 0
It pumped up the median housing price about 40% from summer 2020.
Income hopefully will continue to increase at a greater rate than housing and the rest of the major aggregates of inflation (food, services, transportation, etc) over the next 4 years.
That is how the air from the liquidity bubble or balloon can slowly be released.
For example, houses seemed more affordable in 2013 as compared to 2006. The PE for the S&P 500 was relatively low in 2013 as compared to 2006,
.
.
Wolfman at WolfStreet website mentions about all the liquidity from the pandemic with ZIRP (zero interest rate policy) and all the stimulus spending. 0
It pumped up the median housing price about 40% from summer 2020.
Income hopefully will continue to increase at a greater rate than housing and the rest of the major aggregates of inflation (food, services, transportation, etc) over the next 4 years.
That is how the air from the liquidity bubble or balloon can slowly be released.
For example, houses seemed more affordable in 2013 as compared to 2006. The PE for the S&P 500 was relatively low in 2013 as compared to 2006,
.
.
556
AD
2023 Nov 12, 12:48am
AD
2023 Nov 12, 12:48am
.
Used car prices have fallen to their lowest levels since April 2021, down 18% from peak
The Manheim Used Vehicle Value Index has extended its maximum drawdown to -18%, the largest in index history.
Used car demand is waning as borrowing rates for used cars have surged to 7.3%, sparking an affordability crisis.
https://oilprice.com/Finance/the-Markets/Used-Car-Market-In-Turmoil-As-Prices-Collapse-And-Demand-Wanes.html
.
Used car prices have fallen to their lowest levels since April 2021, down 18% from peak
The Manheim Used Vehicle Value Index has extended its maximum drawdown to -18%, the largest in index history.
Used car demand is waning as borrowing rates for used cars have surged to 7.3%, sparking an affordability crisis.
https://oilprice.com/Finance/the-Markets/Used-Car-Market-In-Turmoil-As-Prices-Collapse-And-Demand-Wanes.html
.
558
AD
2023 Nov 13, 8:54pm
AD
2023 Nov 13, 8:54pm
From Yahoo Finance:
On Tuesday (14 November 2023), investors will digest one of the most important data points the Federal Reserve will consider in its next interest rate decision: October's Consumer Price Index (CPI).
The report, set for release at 8:30 a.m. ET, is expected to show headline inflation of 3.3%, a deceleration from September's 3.7% annual gain in prices, according to estimates from Bloomberg. Over the prior month, consumer prices are expected to have risen 0.1% in October, a slower clip than September's 0.4% monthly increase.
Lower energy costs are likely to have held the headline figures to a smaller gain. Bank of America anticipates a 1.8% month-over-month drop in energy prices, driven by lower gas prices, which fell sharply during the month of October.
On Tuesday (14 November 2023), investors will digest one of the most important data points the Federal Reserve will consider in its next interest rate decision: October's Consumer Price Index (CPI).
The report, set for release at 8:30 a.m. ET, is expected to show headline inflation of 3.3%, a deceleration from September's 3.7% annual gain in prices, according to estimates from Bloomberg. Over the prior month, consumer prices are expected to have risen 0.1% in October, a slower clip than September's 0.4% monthly increase.
Lower energy costs are likely to have held the headline figures to a smaller gain. Bank of America anticipates a 1.8% month-over-month drop in energy prices, driven by lower gas prices, which fell sharply during the month of October.
559
AD
2023 Nov 13, 8:58pm
AD
2023 Nov 13, 8:58pm
2022 was the worst year for inflation since 1980. So in 2024, 12-month inflation will finally steady.
It may be slightly lower than 2023 price levels, so annual inflation in 2024 may steady between 2.5 % and 3.5%.
It may take until 2025 with the current Fed funds rate of 5.5% (at a 23 year high) for the annual inflation rate to drop below 2%.
It may be slightly lower than 2023 price levels, so annual inflation in 2024 may steady between 2.5 % and 3.5%.
It may take until 2025 with the current Fed funds rate of 5.5% (at a 23 year high) for the annual inflation rate to drop below 2%.
560
AD
2023 Nov 13, 9:33pm
AD
2023 Nov 13, 9:33pm
.
since the mid 1980's, annual inflation seems to have been tame and between 2 and 3%
.
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since the mid 1980's, annual inflation seems to have been tame and between 2 and 3%
.
.
562
AD
2023 Nov 14, 10:22am
AD
2023 Nov 14, 10:22am
.
October 2023 inflation numbers (i.e., CPI)
12 month: 3.2%
1 month: 0.0%
recall 12 month CPI peaked around 9.1% back in June 2022 and this was the highest annual CPI since around 1981
.
October 2023 inflation numbers (i.e., CPI)
12 month: 3.2%
1 month: 0.0%
recall 12 month CPI peaked around 9.1% back in June 2022 and this was the highest annual CPI since around 1981
.
563
AD
2023 Nov 14, 10:28am
AD
2023 Nov 14, 10:28am
RWSGFY says
Oil rig count still at least 20% below 2019 levels ... oil prices are reported to go down since traders are forecasting a drop in demand, according to Wall Street Journal and Reuters ...
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Texas rig count also down about +20% since 2019 : https://ycharts.com/indicators/texas_rotary_rigs
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Gas fell ~$1 over the last month in my neck of the woods.
Oil rig count still at least 20% below 2019 levels ... oil prices are reported to go down since traders are forecasting a drop in demand, according to Wall Street Journal and Reuters ...
.
.
Texas rig count also down about +20% since 2019 : https://ycharts.com/indicators/texas_rotary_rigs
.
564
AD
2023 Nov 14, 10:32am
AD
2023 Nov 14, 10:32am
Norway is the leader in Electric Vehicles ... need a lot more electric vehicles to be sold each year in the USA to show a significant decrease in oil demand...
the benefit to the USA if demand for natural gas increases and oil demand drops due to increase in electric vehicle usage, is that natural gas is not priced on the global marketplace, unlike oil ... and the USA is the Saudi Arabia of natural gas ...
.
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the benefit to the USA if demand for natural gas increases and oil demand drops due to increase in electric vehicle usage, is that natural gas is not priced on the global marketplace, unlike oil ... and the USA is the Saudi Arabia of natural gas ...
.
.
565
Misc
2023 Nov 14, 11:54am
ad says
Ahhh, Month over Month CPI was zero, zip zilch, nada.
.
October 2023 inflation numbers (i.e., CPI)
12 month: 3.2%
1 month: 0.2%
recall 12 month CPI peaked around 9.1% back in June 2022 and this was the highest annual CPI since around 1981
.
Ahhh, Month over Month CPI was zero, zip zilch, nada.
567
B.A.C.A.H.
2023 Nov 14, 3:04pm
B.A.C.A.H.
2023 Nov 14, 3:04pm
The logbook with all fuel purchases recorded in my truck goes back to the first fill up on May 5, 2006, in East SJ: $3.31 per gallon.
This weekend, at same station, $4.20 per gallon.
From a simple calculation for CAGR that comes out to about 1.4% annualized inflation in gasoline prices during the past 17.5 years.
The Sky Is Falling Down.
This weekend, at same station, $4.20 per gallon.
From a simple calculation for CAGR that comes out to about 1.4% annualized inflation in gasoline prices during the past 17.5 years.
The Sky Is Falling Down.
568
AD
2023 Nov 14, 3:34pm
AD
2023 Nov 14, 3:34pm
B.A.C.A.H. says
yeah, and you could have gotten a better deal ... according to Gas Buddy website, its $4.09 at Kwik Serv 2370 Alum Rock Ave San Jose, CA
oil traders are pricing in a recession or major drop in oil demand over the next 3 months
.
The logbook with all fuel purchases recorded in my truck goes back to the first fill up on May 5, 2006, in East SJ: $3.31 per gallon.
This weekend, at same station, $4.20 per gallon.
From a simple calculation for CAGR that comes out to about 1.4% annualized inflation in gasoline prices during the past 17.5 years.
The Sky Is Falling Down.
yeah, and you could have gotten a better deal ... according to Gas Buddy website, its $4.09 at Kwik Serv 2370 Alum Rock Ave San Jose, CA
oil traders are pricing in a recession or major drop in oil demand over the next 3 months
.
569
AD
2023 Nov 14, 5:02pm
AD
2023 Nov 14, 5:02pm
Misc says
true, as overall or "all item" CPI was 0% from September to October
CPI excluding food and energy went up 0.2% from September to October
.
ad says
.
October 2023 inflation numbers (i.e., CPI)
12 month: 3.2%
1 month: 0.2%
recall 12 month CPI peaked around 9.1% back in June 2022 and this was the highest annual CPI since around 1981
.
Ahhh, Month over Month CPI was zero, zip zilch, nada.
true, as overall or "all item" CPI was 0% from September to October
CPI excluding food and energy went up 0.2% from September to October
.
570
AD
2023 Nov 14, 6:13pm
AD
2023 Nov 14, 6:13pm
Misc says
ad says
.
October 2023 inflation numbers (i.e., CPI)
12 month: 3.2%
1 month: 0%
1 month: 0.2%
recall 12 month CPI peaked around 9.1% back in June 2022 and this was the highest annual CPI since around 1981
.
Ahhh, Month over Month CPI was zero, zip zilch, nada.
true, as inflation increased 0% from September 2023 to October 2023 ...
a Great Value brand loaf of bread at $1 on 1 January goes up 0.2% in 30 days... then it goes up 0.2% each month..
(1.002^12) x $1 = 1.024 x $1 = $1.024
the loaf of bread costs $1.024 at end of 12 months :-(
I am hoping month over month is less than 0% for November inflation report
ad says
.
October 2023 inflation numbers (i.e., CPI)
12 month: 3.2%
1 month: 0%
1 month: 0.2%
recall 12 month CPI peaked around 9.1% back in June 2022 and this was the highest annual CPI since around 1981
.
Ahhh, Month over Month CPI was zero, zip zilch, nada.
true, as inflation increased 0% from September 2023 to October 2023 ...
a Great Value brand loaf of bread at $1 on 1 January goes up 0.2% in 30 days... then it goes up 0.2% each month..
(1.002^12) x $1 = 1.024 x $1 = $1.024
the loaf of bread costs $1.024 at end of 12 months :-(
I am hoping month over month is less than 0% for November inflation report
571
Misc
2023 Nov 14, 6:35pm
The Street was expecting a core inflation rate of 4.1% YoY. It came in at a 4.0%.
If oil prices keep going down, we may get a negative MoM print for the CPI, but with about a third of the inflation measure being OER or rent and it clocking in at a MoM increase of .4 -.5%, the core rate is gonna stay elevated.
I am still giggling at the Hedge funds that were short long term treasuries on margin going into today.
The MSM is hyping the gain of the stock market today, but with the dollar down about 1.6 - 1.8%, to someone overseas it waw up, but not that much.
If oil prices keep going down, we may get a negative MoM print for the CPI, but with about a third of the inflation measure being OER or rent and it clocking in at a MoM increase of .4 -.5%, the core rate is gonna stay elevated.
I am still giggling at the Hedge funds that were short long term treasuries on margin going into today.
The MSM is hyping the gain of the stock market today, but with the dollar down about 1.6 - 1.8%, to someone overseas it waw up, but not that much.
572
AD
2023 Nov 14, 9:18pm
AD
2023 Nov 14, 9:18pm
Misc says
yeah SPDR Portfolio Long Term Treasury ETF was up 2.1% today and up 3% since this Monday's opening
the same ETF was down 50% last month from its all time high set in late 2020 ... it is now down 46% from its all time high ...
I think the worse is behind us as far as bonds and may be a good time to load up on Vanguard Total Bond Market ETF as inflation has finally been restrained
.
I am still giggling at the Hedge funds that were short long term treasuries on margin going into today.
yeah SPDR Portfolio Long Term Treasury ETF was up 2.1% today and up 3% since this Monday's opening
the same ETF was down 50% last month from its all time high set in late 2020 ... it is now down 46% from its all time high ...
I think the worse is behind us as far as bonds and may be a good time to load up on Vanguard Total Bond Market ETF as inflation has finally been restrained
.
573
Patrick
2023 Nov 15, 12:19pm
Patrick
2023 Nov 15, 12:19pm
https://slaynews.com/news/net-zero-driving-inflation-central-bank-policymaker-warns/
A central bank policymaker has spoken out to warn that the globalist “Net Zero” agenda of the World Economic Forum (WEF) and United Nations (UN) is behind the soaring inflation rates felt around the globe.
According to Catherine Mann, a prominent member of the Bank of England’s (BOE) Monetary Policy Committee, “climate change” policies are a key driver of soaring inflation.
“Climate change” and countries’ different approaches to combat it are likely to boost inflation, Mann warns.
574
zzyzzx
2023 Nov 15, 12:29pm
zzyzzx
2023 Nov 15, 12:29pm
Misc says
https://www.cnbc.com/2023/11/15/wholesale-prices-fell-0point5percent-in-october-for-biggest-monthly-drop-since-april-2020.html
Wholesale prices fell 0.5% in October for biggest monthly drop since April 2020
If oil prices keep going down, we may get a negative MoM print for the CPI,
https://www.cnbc.com/2023/11/15/wholesale-prices-fell-0point5percent-in-october-for-biggest-monthly-drop-since-april-2020.html
Wholesale prices fell 0.5% in October for biggest monthly drop since April 2020
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https://patrick.net/post/1344548/2022-04-11-putin-s-price-hike-failing-administrati
Frankly, I prefer my spaceship to have big tits and not fake inflated ones.
EDIT - numbers drop:
America goes back to the 80s: Surging gas prices and higher rents push inflation to 41-year high of 8.5% as White House blames it on Putin invading Ukraine
The consumer price index rose 8.5% in March from a year ago, the fastest increase since December 1981
Housing costs, which make up about a third of the index, have escalated and show no signs of cooling
Gasoline prices soared 49% in March from a year ago as the war in Ukraine rocked energy markets
Biden's administration tried to get ahead of the dire inflation news by blaming Russian leader Vladimir Putin
But Republicans place the blame for soaring prices on 'Democrats' reckless spending and failed policies'
https://www.dailymail.co.uk/news/article-10711311/Inflation-soars-new-41-year-high-8-5.html?source=patrick.net