Today testified before the House Finance Committee. Rep. Wiley Nickel, a Democrat from North Carolina, made the statement that when Biden took office in the midst of the pandemic/shutdown, the prevailing view was that a soft landing is impossible and a recession is inevitable. he then asked Powell if the U.S. economy was on track for a so-called “soft landing.” “We’re at a place now where the risks to the two mandates, price stability and masimum employment, are much more in balance than they were before, and that means it's not just about getting inflation down,” Powell said. “The job is not done on inflation, we have more work to do there. But at the same time, we need to be mindful of where the labor market is.”
The markets champing at the bit for a rate cut(s) all year. He didn't reach his 2% but all will be forgiven if he performs a little strip tease before the announcement..
that is a valid criticism, that the Fed is not perfect, as opposed to the false narrative of "wrecking the balance sheet" that you have often parroted. while the Fed has not been perfect, it has used its monetary tools to counter the inflationary pressure effectively, from a high of just under 9%, in late 2022, to the current low 3%. according to congressman Wiley Nickel in the House committe meeting today, this has been the steepest decline in inflation, over an 18-months period, ever actually, no, should the convected felon win the election, should that happen---for guiding the economy to a soft landing under Biden;s watch---Powell will be fired
prelude to a soft landing, Unsurprisingly, given how weak the headline and core prints were, Monthly headline inflation to -0.06% in June from 0.00% in May the first time that a Monthly change in CPI was a decrease since early 2020 Monthly core inflation alsoto 0.06% from 0.16% Annual headline inflation to 2.97% from 3.27% Annual core inflation to 3.27% from 3.42% Market odds of a September rate cut surged close to 100% from 75% before this morning's data releases.
I highly doubt voters in November will think so - but I also think that most Americans do not look at it from the perspective of a year or even a couple years. We had a long time with very low and predictable inflation, and then post COVID that all drastically changed and people were seeing a lot of unpredictability. That doesn't even get into other issues, such as home ownership being out of reach for the vast majority of Americans under 30-35 years old, and the accumulation of wealth in pre-existing homeowners that only really benefits select groups of Americans - same with 401K's and the unequal impact of inflation versus minimum wage increases - with the lower middle class and middle class being hit the hardest. I understand that it is SOP for a President and his administration to claim that the economy is doing well, and there are some measures that are positive - but that is not consistent with what many lower middle class and middle class people have and are experiencing - and when they hear the administration claim the economy is great, it feels like gas lighting. How much of all of this is Biden's fault? Not much, and Trump is largely a moron - but historically optimism of the economy is a driver for voters.
Even if inflation has cooled now it's hardly going to help Biden in November. People are still upset about inflation from 2021-2023. The cost of living explosion in housing, insurance, groceries, cars etc etc is still not normalized and has people very upset. People aren't saying, "Well, at least my $6 bag of chips that was $2.50 in 2020 is now only increasing by 15 cents per year again - I'm so relieved - Thank you Joe Biden" No, they are still saying, "WTF chips are $6 a bag these days." People are absolutely livid about the cost of living explosion that took place during the years of the Biden administration and that spells disaster for Biden come November.
I'm just talking about the pure macro econ perspective - most people, even some left leaning economists - put out way-off-base expectations about what it would take to get annual inflation down. They projected years and years of high rates, slow growth, and high unemployment. Instead we did almost none of those things and the "supply/pandemic rebalancing" explanation urged by Sahm, Krugman, others was correct. Time to cut
This is good stuff. But I believe that a person's perception of inflation is just that. I can tell anyone in the grocery store that prices are less this year than last, and I guarantee they would laugh at me. Also, inflation is a state issue as well. what's the price of a gallon of fuel in Texas $3.10? Up here in NY it's still in the 3.65 range. Cali is even worse. Bad example but: Cigarettes in Texas run about 7 bucks a pack My friend smokes and I asked him what the price is for a pack these days he said he spent 15.24. Don't say he shouldn't be smoking. It's just a comparison. Last month beef choice tenderloin was 27.00 per lb. here in NY. Can't imagine how much less it is down in Tex. I bring up tenderloin because that is an item that is personal to me and when I shop you can guarantee that I can tell you what is cost last week, last month, and the month before that. PS, I buy whole tenderloins and take them down myself for 17.00 per lb.
This - although I don't think it is quite that linear. I think it is more that people do not like the inflation since COVID. They don't want to hear excuses or an explanation either - what they know is that Biden has been President for 4 years and in the majority of those years there was inflation unlike any in over 40 years. Couple that with the general unpredictability of the world, housing costs being out of control for example - and they just want change, and that includes the Oval Office. If it wasn't Trump running, but a moderate but charismatic younger Republican - it wouldn't even be close. Some polls out today have 67% of Americans wanting Biden to drop out, yet Biden is tied with Trump - why? It isn't because Americans think Biden is great, it is because Trump has so much baggage. The economy is a huge part of all of this - if Americans felt good about the economy, the fact that Biden looks 120 years old and has neurological issues probably wouldn't be THIS big a problem.... but when you have a bad economy and an uncomfortable voting class, you get zero favors.
My wife is amazingly smart and an impressive person - she got through med school even with both her parents dead and her being homeless for awhile. Having said that, her vice has always been smoking and she cannot stop. She will take two or three puffs and put it out... she goes through two packs a day doing that - in the Chicago suburbs her cigarettes not cost $15 a pack, that is $30 a day just for her to smoke. I am spending nearly $1,000 a month for cigarettes...... and ten years ago, $1,000 was the cost of a mortgage payment each month for some people five miles away from me. So, you couple that with the recent surge in the cost of car and home insurance (doubled the last 6 years), the cost of gasoline having gone up, the cost of groceries having gone up a lot over 5 years - and that is a lot. Now - while I am not happy about it, I can afford the increases with less discomfort than most Americans. However, there are a LOT of American's living close to paycheck to paycheck - and when they see their mortgage payment go up 25% from the increase in homeowners insurance, or see their car payments increase from car insurance payments. This is scary and crippling to people, this is an unseen increase. Couple that with them seeing (all be in distorted) news coverage of immigrants coming into the USA, and staying in hotels we pay for. They view immigrants as competition in a lot of blue-collar areas. They see a focus on things like transgender rights or feminism and they don't relate to the Democratic party. What the Democratic Party needs to realize is that it doesn't have the market on lower middle class and middle-class voters like it believes it does. While it pursues programs that can help the poor and lower middle class, it also supports programs that many lower middle class people do not like, and it's ventures into some social issues is a turn off for many.
Number 1 reason I was never going to be a smoker. I wouldn't piss away $5 a week, let alone multiple times that per day. I could not imagine having an addiction like that. My dad has been a smoking, patch wearing, gum chewer for my entire life. He vapes now. Any stress on his life and he always falls back into it, so I think he's finally giving up and being 100% nicotine free. Curious, has she not tried vaping? Its still a terrible habit, but doesn't have the terrible smell and filters.
She started at 12 years old. She came from a very broken family situation, so she has smoked her entire life. Yeah she tried vaping, but she is convinced it is worse for smoking - I cannot really argue with her as she is a doctor and I am not. She smokes outside so the smell isn't as bad - and after 20 years together I just kind of accept it.
It's not even about the inflation rate anymore. Europe already cut rates yet are seeing a rise in services inflation. Who knows if that'll abate due to lag effects. US unemployment is on an uptick, and would look scary if the numbers persist. Getting employers to start hiring fulltime again will be challenging even if the Fed makes two 25bps rate cuts this year. I just find the mythical 2% inflation rate target funny because Fed boosters have **** memories and think whatever they say at the moment is fact. Only people who fully believe in Fed credibility these days are stock market degenerates waiting for the next fix or hardcore Biden stans, wherever they may be lurking.
A lot of it is an illusion - they cannot control as much as they think, and when they do something, they often have no idea what the ramifications or actual outcome will be. It would be like a Meteorologist claiming he controls the weather.
could not agree w that statement more, which underscores the fact how difficult it is to reverse an rooted economic trend, such as Helicopter Ben using QE to resuscitate a cratering economy Powell using QT to contain inflationary pressure, towards a soft landing
if only u’d enlighten us as to what is it about? include those who habitually parrot false narratives, such as that the Fed is wrecking its balance sheet
GGGGRRRREEEEEEEEEEEEEEEEEEEEEEEEEEEEDDDDDDDDDDDDDDDDD I no longer beleive inflation is a real thing It is like Corporations are people. . . . . Rocket River
Does she light them bad boys back up or just discard after 3 puffs? I bet you could sell a pack of those for $4 in today's economy. I remember my dad telling me he used to walk around Austin in the 70s finding cigarette butts then re-rolling them into full cigs. I considered doing that to shrimp nubs at parties before. I love shrimp.
