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Inflation

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Gold, silver and the USD all fairly steady after some volatility around the time of the announcement. US market slightly up. A bit anti-climactic. The consenus seems to be that inflation is a little hot but is cooling and interest rates will likely pause instead of increase at the next FOMC meeting.

Calm has been restored. As you were.
 
greggles said:
Gold, silver and the USD all fairly steady after some volatility around the time of the announcement. US market slightly up. A bit anti-climactic. The consenus seems to be that inflation is a little hot but is cooling and interest rates will likely pause instead of increase at the next FOMC meeting.

Calm has been restored. As you were.
Click to expand...
Would appear "steady as you go" would be apt
 
I would like to agree with the calm and steady as you go approach, but deep down inside my entrails I feel trouble coming.
The 30Yr auction held after the CPI announcement saw foreign investors flee the US bond market leaving the dealers holding 16%.
The bid to cover ratio was solid, so all the bidding was coming from locals.
Plus the yield on the bonds shot up to 4.345, the highest in 11 years.
As older cheaper debt is rolled over, the interest expense bill for the US govt is getting higher every auction, so they are going to have to keep borrowing ever higher amounts at increasing interest rates which becomes a never ending spiral that spells doom.
I think the doom will be put off for a while as we approach the end of the US reporting year, and as all the C class execs start to massage the VWAP data so their EOY bonus will be nice and fat, then not sure what happens after that.
Mick
 
If memory serves me correct, there was more reaction to the PPI rather than the CPI over the past few months, so don't be surprised if we see more reaction in tonight's US session, especially with the ECB announcement coming along tonight too. Also, another interesting thing to note was the late afternoon action in the TLT - could be potential resistance against the short-term opens from Tuesday and Friday of last week, with a short-term channel forming...
 
458646785678.jpg

"The central bank for the 20 countries that share the euro also raised its forecasts for inflation, which it now expects to come down more slowly towards its 2% target over the next two years, while cutting its expectations for economic growth.

That illustrated the dilemma the ECB faced at the meeting, with prices still rising at more than twice its target rate but economic activity struggling under high borrowing costs and a downturn in China.

Against this backdrop, the ECB sent a clear message it was probably done raising rates.

"Based on its current assessment, the Governing Council considers that the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target," the ECB said".



Aka higher for longer/won't be cutting nearly as soon as anticipated.

Hilariously, lagarde then refused to rule out another hike/said that "can't say that ECB is at peak".
 
I have never been a fan of paul krugman, despite his many books, his professorship at New York Uni, and his Nobel Prize.
Especially when i saw this
1694853283396.png
So, excluding three of the biggest things that people on incomes significantly lower than Krugmans means that inflation is defeated.
For a lot of those people, there is precious little left after buying food, paying for elecytricity, oil or gas and then paying rent.
Lucky to to be too poor to have to worry about the inflated costs of vehicles.
Geez, talk about out of touch.
Mick
 
mullokintyre said:
I have never been a fan of paul krugman, despite his many books, his professorship at New York Uni, and his Nobel Prize.
Especially when i saw this
View attachment 162519
So, excluding three of the biggest things that people on incomes significantly lower than Krugmans means that inflation is defeated.
For a lot of those people, there is precious little left after buying food, paying for elecytricity, oil or gas and then paying rent.
Lucky to to be too poor to have to worry about the inflated costs of vehicles.
Geez, talk about out of touch.
Mick
Click to expand...
I read it that he is saying that those items are lagging indicators so this is an attempt to measure future inflation. That said, the choices seem strange, especially used cars and food! I can understand shelter.
 
mullokintyre said:
I have never been a fan of paul krugman, despite his many books, his professorship at New York Uni, and his Nobel Prize.
Especially when i saw this
View attachment 162519
So, excluding three of the biggest things that people on incomes significantly lower than Krugmans means that inflation is defeated.
For a lot of those people, there is precious little left after buying food, paying for elecytricity, oil or gas and then paying rent.
Lucky to to be too poor to have to worry about the inflated costs of vehicles.
Geez, talk about out of touch.
Mick
Click to expand...

Hmmmm... I thought the whole idea of the CPI calculation was to weight the various components in accordance with the proportion of spending of income in relation to the various "sectors". I understand that he's attempting to gauge future inflation, but there's no guarantee that the sectors he's referring to will deflate in value either. According to the calculation of Australian CPI in 2022, he's devalued about half of the CPI components (housing 22%, food/non-alcoholic beverages 17%, transport 11%)...

www.rba.gov.au

Inflation and its Measurement | Explainer | Education

This series provides short, concise explanations for various economics topics.
www.rba.gov.au www.rba.gov.au
 
mullokintyre said:
I have never been a fan of paul krugman, despite his many books, his professorship at New York Uni, and his Nobel Prize.
Especially when i saw this
View attachment 162519
So, excluding three of the biggest things that people on incomes significantly lower than Krugmans means that inflation is defeated.
For a lot of those people, there is precious little left after buying food, paying for elecytricity, oil or gas and then paying rent.
Lucky to to be too poor to have to worry about the inflated costs of vehicles.
Geez, talk about out of touch.
Mick
Click to expand...
happily he is helping future economists to be as equally useless
one more reason to ignore mainstream media

i feel sorry for traders that need to consume and assess this stuff to make a living
 
IvoryWolf said:
Hmmmm... I thought the whole idea of the CPI calculation was to weight the various components in accordance with the proportion of spending of income in relation to the various "sectors". I understand that he's attempting to gauge future inflation, but there's no guarantee that the sectors he's referring to will deflate in value either. According to the calculation of Australian CPI in 2022, he's devalued about half of the CPI components (housing 22%, food/non-alcoholic beverages 17%, transport 11%)...

www.rba.gov.au

Inflation and its Measurement | Explainer | Education

This series provides short, concise explanations for various economics topics.
www.rba.gov.au www.rba.gov.au
Click to expand...
somehow , i got the same impression , no wonder CPI figures are no longer taken as Gospel
 

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