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Started By
Message
PPI again shows signs of cooling
Posted on 8/13/24 at 8:08 am
Posted on 8/13/24 at 8:08 am
Tomorrow is another big report
We think it comes in showing more coooling which could lead to the .5% cur or more in Sept especially if the jobs reports gets reported accurately
We think it comes in showing more coooling which could lead to the .5% cur or more in Sept especially if the jobs reports gets reported accurately
quote:
The Producer Price Index, which measures wholesale inflation, was reported for the month of July. The Headline PPI figure increased by 0.1%, below expectations of 0.2%. On a year-over-year basis, PPI decreased 0.5% to 2.2%, coming in lower than the 2.3% estimate. Core PPI, which strips out food and energy prices, was flat month-over-month, despite expectations of a 0.2% gain.
Year-over-year, Core PPI increased 0.6% to 2.4%, which was lower than estimates of 2.7%.
6
Posted on 8/13/24 at 8:14 am to SDVTiger
It still ticked up, just not by as much. The rate of increase is leveling off, but we’re not out of the woods.
A September rate cut is still premature.
It all depends on the Fed’s position. If they still believe they need to control inflation via monetary policy, then they might stick to their guns.
If they give way to Fiscal Dominance, then they’ll move to stabilize the debt, giving into inflation, and easing rates.
Monetary and Fiscal Dominance cannot coexist for long, and that’s where we’ve been at for a bit. One has to give and I think we all know Daddy isn’t going to stop spending.
A September rate cut is still premature.
It all depends on the Fed’s position. If they still believe they need to control inflation via monetary policy, then they might stick to their guns.
If they give way to Fiscal Dominance, then they’ll move to stabilize the debt, giving into inflation, and easing rates.
Monetary and Fiscal Dominance cannot coexist for long, and that’s where we’ve been at for a bit. One has to give and I think we all know Daddy isn’t going to stop spending.
Posted on 8/13/24 at 8:19 am to Longhorn Actual
quote:
It all depends on the Fed’s position
Their position is the UE rate. Another bad report and they have to cut
Bowman is really the only still talking hawkish
If you strip our shelter and car insurance from these reports which the fed cant control we are under their made up number of 2%
Posted on 8/13/24 at 8:35 am to SDVTiger
quote:
Their position is the UE rate.
That’s part of their mandate, along with price stability.
They have tools at their disposal to address (or attempt to) each of those.
Which tool they use and how they use it depends on their position on the interaction between monetary and fiscal policy.
Posted on 8/13/24 at 9:09 am to SDVTiger
quote:
If you strip our shelter and car insurance from these reports which the fed cant control we are under their made up number of 2%
We are?
Posted on 8/13/24 at 9:10 am to JohnnyKilroy
Yes 1.8-1.9%
Posted on 8/13/24 at 9:13 am to SDVTiger
According to what? The fake numbers meant to prop up harris? The real number is much higher remember
Posted on 8/13/24 at 9:17 am to JohnnyKilroy
quote:
According to what? The fake numbers meant to prop up harris? The real number is much higher remember
Well we can only work with whats giving to us
The SEP release in March said they believed 4% UE and 2.6% inflation reading would happen this year with 75bps cut
We are at 4.3 UE and 2.6 yet Bowman is saying no cuts yet
Posted on 8/13/24 at 9:19 am to SDVTiger
quote:
Well we can only work with whats giving to us
We know the number is fake. The real number is probably double or triple the fake harris number.
Posted on 8/13/24 at 9:23 am to JohnnyKilroy
quote:
We know the number is fake.
Thanks for the update
Posted on 8/13/24 at 9:28 am to SDVTiger
quote:There is a lot of evidence of biased numbers when initially reported only to be moderated afterwards.
Thanks for the update
Posted on 8/13/24 at 9:29 am to RoyalWe
Kinda like the jobs report?
I mean wtf are we supposed to do
I mean wtf are we supposed to do
Posted on 8/13/24 at 9:31 am to SDVTiger
quote:
he .5%
Would not be higher than .25
Posted on 8/13/24 at 9:37 am to SDVTiger
quote:
I mean wtf are we supposed to do
Certainly not cut rates when we know inflation is at least over 6%
This post was edited on 8/13/24 at 9:39 am
Posted on 8/13/24 at 9:40 am to JohnnyKilroy
quote:
Certainly not cut rates when we know inflation is at least over 6%
Posted on 8/13/24 at 9:56 am to SDVTiger
quote:About what? How you invest? Prepare for the market to go up or go down in the short-term and to go up over the long-term. Also, buy low and sell high. This isn't rocket surgery.
I mean wtf are we supposed to do
Posted on 8/13/24 at 2:36 pm to SDVTiger
quote:
which could lead to the .5% cur or more in Sep
We're not getting a .5 in September. Lulz!Posted on 8/13/24 at 3:12 pm to Bard
quote:
We're not getting a .5 in September. Lulz
quote:
Reuters) - Traders bet on Friday that the Federal Reserve will start easing policy in September with a big half-percentage-point interest rate cut, after government data showed employers added far fewer workers than expected last month, and the jobless rate rose. Interest rate futures contracts now reflect about a 70% chance seen of a half-percentage-point rate cut next month,
quote:
But that conviction has shifted, and economists overwhelmingly predict that the Fed will trim rates by double the prior forecast, or 0.5 percentage points, FactSet data shows.
quote:
Wall Street forecasters also think the Fed will further trim borrowing costs at its November and December meetings, with the majority predicting the benchmark rate could be as low as 4% to 4.25% by year-end, or about 1.25 percentage points lower than its current 23-year high.
Posted on 8/13/24 at 6:33 pm to SDVTiger
It’s already come back from the .5% being the overwhelming bet. It’s 51.5%/48.5% for 50/25bps cut right now. Market odds have been too aggressive and reactive all year. I don’t see that changing unless the August jobs report is just woeful.
Posted on 8/13/24 at 7:26 pm to SDVTiger
quote:
Traders bet on Friday
And? They bet the Fed was going to cut rates 5 times this year, they bet the cuts would start in March. Then May. Then June. They also bet that JPow wasn't going to raise rates almost every time he did (and then they shite the bed when he followed through).
The market is betting on what it wants to see, not what is likely.
PPI's cost increases have slowed but is still growing. UE's big jump was due largely to temp positions being cut. Energy prices are still running high (Brent Crude is up 5% YTD, gasoline is above $3/gallon, home energy costs are up YoY, etc), food prices are still high. All of these work against a .5 cut in September. CPI comes out tomorrow but it would need to have dropped tremendously for the Fed to consider anything more than a .25.
From the data we have right now, there is no way we are getting a .5 cut in September.
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