"No rate cut for you!” (Fed Chairman Powell's “Soup Nazi” episode)
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[i][b]Photo above [/b]- Do you need more proof that AI images are plagiarized garbage? Mudjourney created this one in response to the prompt "Fed Funds Nazi" . . .[/i]
The stock market had another flash crash yesterday. At first glance I thought it might be due to something important. Like Iran on the verge of declaring war on Israel. The CIA DID warn that an attack was imminent. Israel promptly turned off their GPS nationwide. (This is really true).
But no – the market is apparently shrugging off a nuclear armed dictatorship threatening to bomb a nuclear armed democracy. Yesterday's market move was because (ta-da) . . . Fed Chairman Powell gave another speech. (see link below).
Sorry folks – no inerest rate cut anytime soon. Does this mean inflation is NOT licked after all? Or that tripling interest rates isn't the right Hogworts' spell to make housing, food, and energy affordable again?
Well, people would only have been expecting a rate cut if they took Powell seriously last time. Like the speech he gave on November 1st, 2023. The DJIA was around 32,000 that day. He reassured everyone that rate cuts were coming. He did it again on February 4th this year, during a surprise TV appearance on 60 minutes. The Dow had dropped almost 2% the day before. Powell's TV cameo reassured the markets. The Dow soared afterwards. It's now 8,000 POINTS higher than the day he made his November 2023 speech.
[b]Keep in mind, this is about interest rates[/b]. Not corporate earnings. Or nuclear war. Or the national debt, homelessness, or Fentanyl overdoses. The market is transfixed on Jerome Powell. All he had to do is say "nyet" to send the Dow in the wrong direction.
I expect the indexes will rise a bit over the next week or so, so please don't post obscene replies in this thread reminding me that the market always goes up and down. It certainly does. But should the number one factor be speeches by some government bureaucrat? This isn't frickin' China, for Pete's sake.
I stand by my earlier snarks that the Fed Funds rate is being managed for 2024 election benefits. The market went up after Powell's 60 minutes cameo. So did Biden's polling numbers. Las Vegas odds-makers say he's now favored to win. If the market keeps going down . . . how will Biden do in the polls? ("It's the economy stupid", as some advisor once had to remind Bill Clinton).
We WILL see an actual rate cut, as we get closer to the election. Whether or not inflation has changed. Or at least there will be a speech promising a rate cut.
I'm just sayin' . . .
[b][u]Fed members' updated interest rate outlooks rock markets (msn.com)[/u][/b]
@SusanInFlorida says, in response to a graph of the Bureau of Labor Statistics Consumer Price Index [quote]that's only true if you pick the ONE AND ONLY inflation measure which magically excludes housing, energy, and food.
you believe in magic. how charming![/quote] [b]DEAD WRONG!!! [/b] AS USUAL!!!
The overall CPI (Consumer Price Index) includes energy, food, rent, and a weighted market basket of over 200 items.
BLS also publishes a "Core" measure known as the CPI-U as well as standalone food and energy indices. CPI-U excludes food & energy, while the "headline" CPI includes both.
You can read about the CPI market basket here: [b]https://www.bls.gov/opub/hom/cpi/concepts.htm[/b]
@SusanInFlorida could have cleared up her misconceptions here: [b]https://www.bls.gov/cpi/factsheets/common-misconceptions-about-cpi.htm#Question_1[/b] where it says, explicitly, [quote] [b]Has the BLS removed food or energy prices in its official measure of inflation?[/b]
No. The BLS publishes thousands of CPI indexes each month, including the headline All Items CPI for All Urban Consumers (CPI-U) and the CPI-U for All Items Less Food and Energy. The latter series, widely referred to as the "core" CPI, is closely watched by many economic analysts and policymakers under the belief that food and energy prices are volatile and are subject to price shocks that cannot be damped through monetary policy. However, all consumer goods and services, including food and energy, are represented in the headline CPI. [/quote]
Lemme underline that key point: [u]However, all consumer goods and services, including food and energy, are represented in the headline CPI. [/u]
@SusanInFlorida claims: [quote]i made the point that record breaking full employment proves that high fed fund rates are NOT EFFECTIVE fighting inflation.[/quote] Something has lowered inflation dramatically, as the [b][i]full[/i][/b] CPI - including food, energy, and housing - clearly shows! Gosh, @SusanInFlorida, the deeper we dig into your comments, the more wrong-headedness we uncover😂🤣
@ElwoodBlues breaking news - fed chairman powell warned that rate cuts are not coming anytime soon, because inflation is running at twice the target, and getting worse.
@SusanInFlorida You haven't smashed a single claim of mine. Inflation HAS come down, as the graph proves. Down from over 8% to under 4%; quite a drop, and as I said, [i]something[/i] caused that drop. BTW, that's the WHOLE CPI, including food, energy and housing. Sure, Powell's target is lower still, but the drop is quite evident.
Yeah. Despite your REPEATED claims to the contrary, the overall CPI (Consumer Price Index) includes energy, food, rent, and a weighted market basket of over 200 items.
BLS also publishes a "Core" measure known as the CPI-U as well as standalone food and energy indices. CPI-U excludes food & energy, while the "headline" CPI includes both.
[quote][b]Has the BLS removed food or energy prices in its official measure of inflation?[/b]
No. The BLS publishes thousands of CPI indexes each month, including the headline All Items CPI for All Urban Consumers (CPI-U) and the CPI-U for All Items Less Food and Energy. The latter series, widely referred to as the "core" CPI, is closely watched by many economic analysts and policymakers under the belief that food and energy prices are volatile and are subject to price shocks that cannot be damped through monetary policy. However, all consumer goods and services, including food and energy, are represented in the headline CPI. [/quote] [b]https://www.bls.gov/cpi/factsheets/common-misconceptions-about-cpi.htm[/b]
I notice you're not defending your absurd claim that housing has "risen 10% last year," eh?
Perhaps you looked around and realized that your own housing hasn't risen 10% and started to wonder why not, [b]LOL!!![/b]
I'm gonna file that silly claim with [i]"A tree is almost 100% carbon"[/i] and [i]"When you want to leave it's $23 to cross the bridge again"[/i] and your labeling of New York as [i]"the dirtiest, most dangerous city in America"[/i] and other howlers🤣😂
this must be so embarrassing for you, when reality smashes your risible claims, eh?
Not to worry. The monthly jobs report came out this morning and continues to show a robust labor market. The stock market is already up over 220 points as a result.
@SusanInFlorida Not at all. Inflation is running around 3.1% right now, which is much lower than it was two years ago, and close to the 30 year average. So the Fed has been effective in bringing interest rates down, and the economy and labor market have responded favorably. If you lower rates too much at this point, you risk triggering increased inflation again. They obviously are slowly reducing rates, which given the current economic conditions, is exactly what they should be doing.
@SusanInFlorida For the last month data are available (February), the core inflation rate was 3.2%. Food was up 2.2%, energy was down 1.9%, and rents were up 5.74%. In other words, the Fed has been effective in reducing inflation, including the real costs to consumers.
You are thinking of the "supercore" inflation measure. The CPI is exactly the same measure that Trump used to brag about and that republicans tried to bash Biden with in 2022.
@SusanInFlorida More proof you have no clue what you're talking about.
[quote] The Consumer Price Index (CPI) consists of a family of indexes that measure price change experienced by urban consumers. Specifically, the CPI measures the average change in price over time of a market basket of consumer goods and services. The market basket includes everything from food items to automobiles to rent. The CPI is perhaps the most noted measure of consumer inflation in the United States, and it is used by policy makers to understand and analyze the economy. It is used in many official contexts, for example to escalate Social Security and other federal payments, to adjust tax brackets, to deflate other time series data, and to convert nominal dollars to real dollars. It is also widely used by businesses and private citizens to adjust wages and to escalate rents and other payments. [/quote] [b]https://www.bls.gov/opub/hom/cpi/concepts.htm[/b]
Lemme repeat the key point: [i]The market basket includes everything from food items to automobiles to rent.[/i]
Did you see that? Maybe you need a bigger font [big]The market basket includes everything from food items to automobiles to rent.[/big]
For someone who posts regularly about economics, you sure have a LOT to learn😂🤣
Now, to review: the CPI, which [b][i] includes everything from food items to automobiles to rent [/i][/b] has been dropping, as the data clearly shows😂🤣 😂🤣
Gosh, @
