Reference: https://yardeni.com/charts/cpi/ Dr. Edward Yardeni is a well-known figure. YARDENI: “... Even closer to the Fed's target are both the core PCED and #CPI inflation rates excluding rent, at 2.2% and 2.1% y/y. We continue to expect that inflation will moderate to 2.0% y/y over the rest of this year without a recession ..." (hooray, 80% of us were and are still wrong) Seriously, inflation is looking good except for a few areas. Rent is still recovering. But insurance keeps going up. I have heard NOTHING or next to NOTHING about solutions for that. It's as if the people in power are unserious about solving serious issues. Is insurance the new education and health inflation? Are we just going to accept it while pretending that food and gas are the biggest issue?
The driver of auto insurance --> much more complicated. https://news.bryant.edu/perfect-storm-factors-driving-auto-insurance-rate-hikes What’s caused the recent spike in auto insurance rates? The recent spike in personal auto insurance rates – by some measures, as much as 20% or more in some recent months, indicated by current versus costs 12 months prior – is a confluence of several factors. Almost a perfect storm, one might say. The cyclical nature of the insurance business. During 2022 and into 2023, insurers had large underwriting losses. Over the last year, they have been trying to increase rates and rate adequacy to sustainable levels. This is a very common phenomenon in property-casualty insurance – a multi-year cycle from high rates accompanied by insurer profitability to lower rates and insurer losses, and back-and-forth again and again – and has existed as a industry reality for many decades. This cycle is partially driven by competition and the coming and going of alternative risk management mechanisms which compete with traditional insurance. Supply chain issues. During and immediately after the pandemic, computer chips and other necessities for the manufacture and availability of modern automobiles saw supply shortages, leading in turn to supply shortages of cars. This caused price increases with respect to both new and used vehicles, and vehicle cost or value influences insurance premiums. Increasing vehicle repair costs, due to more technically sophisticated electronic and computerized equipment in vehicle manufacturing, as well as certain modern manufacturing techniques that often require the replacement or repair of a large integrated part (as opposed to a smaller component in the past). Social inflation. This is the general tendency of insurance losses to inflate at a higher rate than overall consumer inflation and includes social forces involving things like increased litigiousness and larger tort awards. Driving behavior. Even before the pandemic, there was empirical evidence that overall driving behavior – perhaps most notably, distracted driving – was causing more frequent accidents and even fatalities. https://www.forbes.com/advisor/car-insurance/car-insurance-rates-up-again/ Insurers cite several factors for rising car insurance rates. They include: Higher costs. An increase in prices for car parts, repairs and new and used cars, along with higher medical costs, are making claims more expensive. In addition, many newer cars feature more sophisticated technology that’s pricier to fix. “Sophisticated vehicle safety systems can reduce accidents but they haven’t held down rates because they are so expensive to repair,” notes Amy Danise, lead insurance analyst for Forbes Advisor. “A small crash can mean substantial repair bills when exterior cameras and sensors are damaged.” An increase in accidents. The number of insurance claims related to car crashes has risen 14% since 2020, while claim severity jumped 36%, according to a July 2023 report from the American Property Casualty Insurance Association. A spike in auto theft. Car theft rates went up sharply in 2023, increasing 29% in the 34 cities included in a year-end report by the Council on Criminal Justice. It found that motor vehicle theft has more than doubled since 2019, even as other crime rates fell. The National Insurance Crime Bureau reports that in 2023, vehicle thefts in the U.S. topped 1 million for the second consecutive year. More severe weather. The number of catastrophic weather events has increased, causing more vehicles to be damaged by floods, hail, fire, hurricanes and tornadoes.
willful stupidity as parroted by Invisible, similar to these gems the Fed is exploding its future balance sheet the Fed is wrecking its balance sheet
you need to stop lying. Jamie Dimon readily admits that he doesn't know the full effect of QE. Jaimie Dimon has been recognize as America's bamker; been the CEO of the World largest bank for ~~20 years/ he is humble / secured enough to admit that he doesn't know the full effect of QE contrast that w the convenient parroting---blanket assertion w no details---by the economic illiterate
Anyone care to tackle 23% inflation? These rates are far more expensive than the national average ($2,377 as of 2023), and homeowners in many states are growing accustomed to soaring insurance premiums. Texas saw the nation's biggest rise in insurance costs in 2023, up 23% year over year, according to S&P Global data. It's also simply getting harder to find coverage, period. Many home insurers are leaving states where climate change is causing costs to soar, including Florida, Louisiana, California and Colorado. This spring, a Texas Monthly writer lamented “What the Bleep Is Going on With Texas Home Insurance?” while rehashing his experiences repeatedly getting denied insurance on a new home, along with tales of other homeowners being hit with premium hikes of 60% or 80%. Link
Climate change has nothing to do with insurance going up in Florida. Home values have almost doubled in the last 5 years coupled with the lack of regulations of structures being built on barriers islands and the intercostal and flood zones.
There might be some connection. https://www.law.georgetown.edu/salp...mate-change-and-an-unstable-insurance-market/
Those flood zones are expanding and barrier islands while always vulnerable are even more vulnerable with storms increasing in severity.
Florida didn't have a big storm last year. The previous, Ian hammered SWFL but it also did massive damage on the east coast. The severity on the east coast was not the issue. It wiped out the beaches on the barrier island. These are million dollar houses and endless rows of condos build a couple hundred feet from the ocean. They have no business being built there and they certainly shouldn't be insured. Ian also flooded the hell out of the St John's river basin. Over the last 20 years, this area has seen a massive boom in homes. Much of this provided flood relief, but like Houston, the water has no where to go. Hurricanes of all sorts are common to Florida. This is nothing new. Flooding has been the biggest issue, not wind damage. Yes, the pan handle was wiped out a couple years ago, but this is generally not the case otherwise.
The Federal Reserve is far from perfect, criticisms are warranted; but certainly not these meaningless rhetorics one of Jamie Dimon's criticism has been that the Fed was late to QT/raise the rate here is another valid criticism of the Fed, by the WaPo, based on economic reasoning. Note to Fed: It’s okay to cut interest rates now The Fed targets inflation as measured by the change in the personal consumption expenditures (PCE) deflator, which tracks the prices of a representative mix of goods and services purchased by the typical American. By this measure, inflation peaked at well over 7 percent two years ago, and while it has fallen to below 3 percent today, it still remains well above the Fed’s 2 percent target. The widely followed consumer price index shows a similar pattern. The economy has weathered the Fed’s higher-for-longer strategy admirably well, but he job market also appears increasingly fragile, as businesses have pulled back on hiring, cut employees’ hours and are using fewer temp workers. They have been loath to lay off workers, but that could quickly give way under the increasingly heavy weight of high interest rates. There is no reason to take these risks for the sake of hitting the 2% inflation target. Better for the Fed to recognize its hard-fought win against inflation and begin, finally, to cut interest rates. it is above my pay grade---as well as not having all the available metrics---insofar as how the Fed should be managing the $ supply in circulation, but I tend to agree with the conclusion opineed by this Op-Ed by the WaPo
Senators Slam Fed Chair, Demand Interest Rate Cuts They highlighted the actions of other central banks, such as the ECB and the Bank of Canada, which have recently cut rates. They suggest that the Fed should follow suit and reconsider its 2% inflation target. According to their letter to the Fed Chair, failing to align with these global trends could lead to a weakening dollar and tighter financial conditions, potentially slowing down economic growth. Actually, with all other variables unchanged, other courntries cutting their interest rates has the effect of strengthening the US dollars
the World Bank’s chief economist, Indermit Gill, is hinting that the Fed should cut rates if so, U.S. economy will be powering better global outlook
If the economy is doing as fantastic as @adoo and his klutzy twin @astros123 claim, why do they keep insisting on dropping rates?
In contrast to the pretentious illiterate parroting these gems the Fed is Exploding its future balance sheet, Wrecking it’s balance sheet,
I'm not the one in an inflation thread crying and wondering why the Fed won't lower rates sooner than she wants. Pssst... It's inflation
