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Inflation

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Meanwhile in Canada, their CB has dropped the funds rate by 50BPS.
Perhaps they were spooked by Powell.
Mick

Some welcome news for Canadians looking for interest rate relief: Canada’s central bank just announced its fourth rate cut this year, bringing its overnight lending rate down to 3.75% from 4.25%.

The cut of 50 basis points comes after the Bank of Canada (BoC) announced a series of 25 basis points cuts throughout this year. The latest rate cut was in September, when the central bank sliced its lending rate by 25 basis points, bringing it down to 4.25% from 4.50%.

"With inflation now back around the 2% target, Governing Council decided to reduce the policy rate by 50 basis points to support economic growth and keep inflation close to the middle of the 1% to 3% range. If the economy evolves broadly in line with our latest forecast, we expect to reduce the policy rate further," the BoC said in its October 23 announcement.

"However, the timing and pace of further reductions in the policy rate will be guided by incoming information and our assessment of its implications for the inflation outlook."
Click to expand...
 
JohnDe said:
Their inflation rate is below their target - Inflation in September sank to 1.6 percent, below the 2 percent target.
Click to expand...

The three previous cuts were all 25 points when inflation fell from 2.7 in June, to 2.5 in July, then 2 in August.
When Forecast GDP growth for 2025 is 1.7%, and the majority of that growth is expected to come from government expenditure, and housing has tanked, it looks suspiciously like the CB was spooked.
Mick
1729757757222.png
 
SirRumpole said:
Who is really to blame for inflation?

www.abc.net.au

It's finger-pointing time on Australia's 'homegrown' inflation problem

What, or more precisely who, is to blame for the inflation episode that has up-ended our lives for the past three years?
www.abc.net.au www.abc.net.au
Click to expand...

Governments, and specifically lazy politicians.

Housing costs is the biggest contributor to inflation, people need higher wages to pay the mortgage and rent. Higher wages lead to higher costs.

Governments, including local councils, are addicted to increasing population numbers to fund all their pipe dreams.

Some of the pipe dreams include regulations that increase the cost of living, health and safety, climate action, renewable power generation and storage. These added burdens increase the cost of building and add to the expenses of household budgets, which requires higher wages and increases inflation.

People want to save the planet, they want to help the poor and war traumatised, we want better healthcare, we need to look after our elderly and disadvantaged. So, governments create new bureaucracies and systems to give us things like the NDIS, and Royal Commissions to find answers, regulations to improve health and homelessness, and a myriad of other measures that strain the budget.

The worker has to pay more tax, higher insurance, increased power and fuel bills. This requires higher wages, which increase inflation.

Businesses and government input cost increase due to the higher cost of power and wages, and ultimately the goods and service that they use and offer. They increase the cost of their product, which in turns causes inflation.

People struggle to pay all their bills. Wages cannot continue to increase. Governments step in and offer 'cost of living relief' in way of cash payments and tax relief. Which increases inflation.

Where did this all start? Governments, specifically politicians poorly educated in economics and history.
 
JohnDe said:
Some of the pipe dreams include regulations that increase the cost of living, health and safety, climate action, renewable power generation and storage. These added burdens increase the cost of building and add to the expenses of household budgets, which requires higher wages and increases inflation.
Click to expand...
The big problem with energy isn't the means of generation, although that does play a role, but the structure of the industry.

Best explained by saying almost half the consumer's bill isn't paying for any physical generation, transmission or distribution of electricity but is instead going to "overhead" costs.

And that's overhead costs additional to the overheads wrapped into the cost of generation, transmission and distribution.

Now realise this same problem applies across much of the economy and that's the point where so much becomes clear. :2twocents
 
JohnDe said:
Governments, and specifically lazy politicians.

Housing costs is the biggest contributor to inflation, people need higher wages to pay the mortgage and rent. Higher wages lead to higher costs.

Governments, including local councils, are addicted to increasing population numbers to fund all their pipe dreams.

Some of the pipe dreams include regulations that increase the cost of living, health and safety, climate action, renewable power generation and storage. These added burdens increase the cost of building and add to the expenses of household budgets, which requires higher wages and increases inflation.

People want to save the planet, they want to help the poor and war traumatised, we want better healthcare, we need to look after our elderly and disadvantaged. So, governments create new bureaucracies and systems to give us things like the NDIS, and Royal Commissions to find answers, regulations to improve health and homelessness, and a myriad of other measures that strain the budget.

The worker has to pay more tax, higher insurance, increased power and fuel bills. This requires higher wages, which increase inflation.

Businesses and government input cost increase due to the higher cost of power and wages, and ultimately the goods and service that they use and offer. They increase the cost of their product, which in turns causes inflation.

People struggle to pay all their bills. Wages cannot continue to increase. Governments step in and offer 'cost of living relief' in way of cash payments and tax relief. Which increases inflation.

Where did this all start? Governments, specifically politicians poorly educated in economics and history.
Click to expand...
It is a sad reality of life that wages growth and the cost of everything is always on the up.
Required wages for a sustainable living standard are akin to a small dog chasing its own stubby tail, almost gets to it but is just short of the mark.
 
over9k said:
Long end of the yield curve now absolutely soaring:

View attachment 187469

Markets are basically pricing trump keeping rates low for the short term (while he's in office) and his policies having some really seriously detrimental effects long term.

I agree with the markets.
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I assume they're US numbers (no 30 yr here)

No inversion any more
 
mullokintyre said:
Its going to be a big problem for Trump administration if they keep borrowing money, and the market refuses to buy at the coupon yield.
the next market auction will be interesting.
mick
Click to expand...

If the Trump administration can drastically reduce government expenditure, that will help take some of the load off of inflation and lending.

Figures from the Treasury Department show the federal government spent north of $6.7 trillion over the yearlong period that ended in September, running a deficit of more than $1.8 trillion during the time frame.​

Trump is putting business minded people into positions to help reduce costs of duplication and waste, and also to find new innovation for productivity.

Will it happen? Time will tell.

"Your money is being wasted," Musk said to an enthusiastic crowd for Trump, adding, "We’re going to get the government off your back and out of your pocketbook." Musk’s proposal aligns with Trump’s campaign rhetoric of reducing federal expenditures and shrinking government intervention.​
 
JohnDe said:
If the Trump administration can drastically reduce government expenditure, that will help take some of the load off of inflation and lending.

Figures from the Treasury Department show the federal government spent north of $6.7 trillion over the yearlong period that ended in September, running a deficit of more than $1.8 trillion during the time frame.​

Trump is putting business minded people into positions to help reduce costs of duplication and waste, and also to find new innovation for productivity.

Will it happen? Time will tell.

"Your money is being wasted," Musk said to an enthusiastic crowd for Trump, adding, "We’re going to get the government off your back and out of your pocketbook." Musk’s proposal aligns with Trump’s campaign rhetoric of reducing federal expenditures and shrinking government intervention.​
Click to expand...
You are putting the cart before the horse, he has not even been sworn in yet.
We have yet to see any official nominations for the multitude of positions becoming available, only a few throw away lines.
When we see some real names, then you can make a guess about what they may or may not do.
Some of his choices last time around were not great.
Trump has shown in the past to be somewhat erratic, a tad arrogant towards just about everyone else, and has no interest or acumen in the world outside of the US.
It is to be hoped that those he does put in charge display the interest and acumen he lacks.
Mick
 

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