Producers prices reveal margin compression, consumer prices moving higher.
That is what the Fed forecast would happen in 2025. Proven harder to live with increases in inflation & unemployment in real time.
That is what the Fed forecast would happen in 2025. Proven harder to live with increases in inflation & unemployment in real time.
Goods and services both risking, with affluent households buoying travel costs.
Those out on vacation in August dropped to second lowest on record as low and middle income households curbed discretionary spending. Travel over labor day hit all time high.
Those out on vacation in August dropped to second lowest on record as low and middle income households curbed discretionary spending. Travel over labor day hit all time high.
Air fares snd hotel rooms regained ground lost earlier in the year.
Vehicles and vehicle repairs moving up with other big ticket goods prices. That will spillover into the cost of insurance along with last year’s hurricanes and fires at start of year.
Vehicles and vehicle repairs moving up with other big ticket goods prices. That will spillover into the cost of insurance along with last year’s hurricanes and fires at start of year.
Coffee prices got an extra boost from 50% tariffs on Brazil. Combined with poor harvest to push prices up more that 20% from a year ago and within tenths of all time largest year-on-year increase in 2011. We will soon exceed that record.
The PPI and CPI data suggest that the PCE measure of inflation will come in hot as well.
Look for 0.3% overall and with rounding we could see core rise 0.4%. That would push PCE to a 2.8% annual gain from 2.6% in July, its hottest pace since March 2024.
Look for 0.3% overall and with rounding we could see core rise 0.4%. That would push PCE to a 2.8% annual gain from 2.6% in July, its hottest pace since March 2024.
Core PCE could jump 3.1% with rounding from a year ago in August. That is the hottest pace since November 2023!
That is the wrong direction for the Fed.
Is it transitory or normalizing inflation. That is the puzzle for the Fed.
That is the wrong direction for the Fed.
Is it transitory or normalizing inflation. That is the puzzle for the Fed.
Fed has duel mandate. Price stability and full employment. We are missing on both BUT can’t sustain full employment without price stability.
That leaves the Fed at odds with itself, with doves betting the boost in price is transitory and lobbying for an outsized cut &…
That leaves the Fed at odds with itself, with doves betting the boost in price is transitory and lobbying for an outsized cut &…
…hawks pushing to stand pat.
We could easily see dissents move in opposite directions at the September meeting. The last time we saw that was September 2019, on heels of 2018-19 trade war.
We could easily see dissents move in opposite directions at the September meeting. The last time we saw that was September 2019, on heels of 2018-19 trade war.
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