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Core inflation rate INCREASED +.2% in the month of August coming in at 2.9% year-over-year

Posted on 9/26/25 at 8:57 am
Posted by LSURussian
Member since Feb 2005
133426 posts
Posted on 9/26/25 at 8:57 am
quote:

The core personal consumption expenditures price index showed inflation in August at 2.9% on an annual basis after rising 0.2% for the month. Both were in line with estimates.

The personal consumption expenditures price index posted a 0.3% gain for the month, putting the annual headline inflation rate at 2.7%, the Commerce Department reported Friday.

The headline annual inflation rate was a slight increase from the 2.6% in July while the core rate was the same.
CNBC.com

So, inflation ticked up in August year-over-year and still well above the Fed's inflation target.

Can somebody please explain why rates need to be cut??
Posted by SmackoverHawg
Member since Oct 2011
30886 posts
Posted on 9/26/25 at 8:59 am to
Isn't that just a little below what they were expecting?
Posted by LSURussian
Member since Feb 2005
133426 posts
Posted on 9/26/25 at 9:01 am to
quote:

Isn't that just a little below what they were expecting?
I think the article I linked says the inflation numbers were "as expected."
Posted by SloaneRanger
Upper Hurstville
Member since Jan 2014
12515 posts
Posted on 9/26/25 at 9:02 am to
Can somebody please explain why rates need to be cut??

Well I guess the argument is that inflation isn’t the only consideration. I don’t know whether they need to be cut or not. But I guarantee you that if a Dem was in office they’d be cut.

ETA: Where do these figures come from? If it’s the UMich figures, then those aren’t worth much anyway.
This post was edited on 9/26/25 at 9:26 am
Posted by SmackoverHawg
Member since Oct 2011
30886 posts
Posted on 9/26/25 at 9:04 am to
I'd go for another 25 basis points next month and then see what the numbers show. I agree that rapid deep cuts aren't needed and could be detrimental, but what do I know?
Posted by TheBoo
South to Louisiana
Member since Aug 2012
5343 posts
Posted on 9/26/25 at 9:12 am to
YOU MEAN we aren't in deflation yet!
Posted by Bard
Definitely NOT an admin
Member since Oct 2008
57716 posts
Posted on 9/26/25 at 9:14 am to
quote:

Isn't that just a little below what they were expecting?
Nope, it was right down the line.

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The key takeaway here though is that inflation still grew even though it was just .1 (both MoM and YoY), meaning we cut rates with sticky/growing inflation.
This post was edited on 9/26/25 at 9:15 am
Posted by HailHailtoMichigan!
Mission Viejo, CA
Member since Mar 2012
73006 posts
Posted on 9/26/25 at 9:24 am to
quote:

an somebody please explain why rates need to be cut??


Because the job market is in way worse shape than inflation is high

This isn’t difficult

The job market is in shambles right now.

Nobody is hiring
Posted by SmackoverHawg
Member since Oct 2011
30886 posts
Posted on 9/26/25 at 9:25 am to
I saw an argument from a Wharton economist the other day that based on what he was seeing, higher rates were hurting the supply side and driving inflation. He laid it out pretty good that judicious cuts would help increase supply to the extent that prices would stabilize prices.
Posted by Joshjrn
Baton Rouge
Member since Dec 2008
31407 posts
Posted on 9/26/25 at 9:34 am to
quote:

Because the job market is in way worse shape than inflation is high

This isn’t difficult

The job market is in shambles right now.

Nobody is hiring

Is the job market "in shambles" because rates are too high, or because of some other factor? If some other factor, is it impossible to modify that factor, or could we modify it to the result of a better job market without impacting inflation?
Posted by LSURussian
Member since Feb 2005
133426 posts
Posted on 9/26/25 at 9:34 am to
quote:

The job market is in shambles right now.

Nobody is hiring
The board's resident Drama Queen has spoken.
Posted by Longhorn Actual
Member since Dec 2023
2858 posts
Posted on 9/26/25 at 10:02 am to
They don’t.
Posted by LSURussian
Member since Feb 2005
133426 posts
Posted on 9/26/25 at 10:12 am to
quote:

ETA: Where do these figures come from? If it’s the UMich figures, then those aren’t worth much anyway.
If you click on the CNBC link I posted in my topic's first post it will give you that information.
Posted by Bard
Definitely NOT an admin
Member since Oct 2008
57716 posts
Posted on 9/26/25 at 10:19 am to
quote:

I saw an argument from a Wharton economist the other day that based on what he was seeing, higher rates were hurting the supply side and driving inflation. He laid it out pretty good that judicious cuts would help increase supply to the extent that prices would stabilize prices.


I get that, but that ignores the continued strong expansion of the money supply.



Inflation is a function of too much money chasing too few goods. Cutting rates helps on the supply end, but it's not going to outweigh the constant creation of extra money. As such, at best it's a placebo that allows the inflationary can to be kicked down the road.
Posted by LSURussian
Member since Feb 2005
133426 posts
Posted on 9/26/25 at 10:24 am to
quote:

Cutting rates helps on the supply end, but it's not going to outweigh the constant creation of extra money.
"Cutting rates" means the Fed is intentionally increasing the money supply.
Posted by BCreed1
Alabama
Member since Jan 2024
6281 posts
Posted on 9/26/25 at 10:34 am to
quote:

Can somebody please explain why rates need to be cut??


The rates really do not have much to do with it now.
Posted by BCreed1
Alabama
Member since Jan 2024
6281 posts
Posted on 9/26/25 at 10:39 am to
quote:

Wharton economist the other day that based on what he was seeing, higher rates were hurting the supply side and driving inflation. He laid it out pretty good that judicious cuts would help increase supply to the extent that prices would stabilize prices.



This is 100% fact.

Most people are trying to wrap their minds around the new economy. This is not what they grew up on anymore.
Posted by lynxcat
Member since Jan 2008
24979 posts
Posted on 9/26/25 at 10:44 am to
quote:

Because the job market is in way worse shape than inflation is high


This would be the rationale.

quote:

The job market is in shambles right now.


This is not accurate.
quote:

Nobody is hiring


Unemployment is steady. Hiring is only one side of the equation. There aren't broad layoffs either.
Posted by cgrand
HAMMOND
Member since Oct 2009
46209 posts
Posted on 9/26/25 at 11:40 am to
quote:

Can somebody please explain why rates need to be cut??
they dont, current rates are fine, you already know why there is a clamor to lower them and its not based in economic analysis
Posted by BCreed1
Alabama
Member since Jan 2024
6281 posts
Posted on 9/26/25 at 12:13 pm to
quote:

and its not based in economic analysis


BS
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