Article

2023-05-28 Economy

'Devastating' Inflation Report Shatters Hopes of Economic Turnaround

[Townhall] Remember more than one year ago when the White House, President Biden, and the rest of his administration told Americans inflation was "transitory?" Well, now more than two years into his term, Biden's first of many attempts to avoid blame for rising prices is still being debunked anew thanks to Friday morning's release of April's Personal Consumption Expenditures (PCE) price index.

Considered the "preferred gauge" on which the Federal Reserve bases its monetary policy decisions, the PCE price index surged again in April, blowing past some economists' estimates of a 3.9 percent annual advance to register a 4.4 percent increase over the year. Core PCE — excluding more volatile food and energy costs — also beat expectations with a 4.7 percent increase, though by a smaller margin.

Posted by Besoeker 2023-05-28 00:00|| || Front Page|| [11132 views ] Top

#1 probably another 25 basis point rise in the Fed Funds rate

maybe 50 basis points

Posted by lord garth 2023-05-28 00:40|| 2023-05-28 00:40|| Front Page Top

#2 That's okay, Lord Garth - we can just print more money to cover the debt and we're good to go!

Whoever said too much money chasing too few goods is inflationary? I've heard Nobel Prize recipients like Paul Krugman tell me otherwise! And I went to college, so I believe him!

Posted by Raj 2023-05-28 00:57|| 2023-05-28 00:57|| Front Page Top

#3 Who are the stupid people who had hope?

Posted by Super Hose 2023-05-28 08:21|| 2023-05-28 08:21|| Front Page Top

#4 Raj,

actually money supply seems to have peaked in March 2023 (both M1 and M2) and is down 1-4% since then (May figures not out yet).

it is still about 30% above pre pandemic levels which I admit is pretty awful, but at least it is a start

Posted by lord garth 2023-05-28 08:43|| 2023-05-28 08:43|| Front Page Top

#5 Their inflation numbers are lots lower than what I see

Posted by Glenmore 2023-05-28 09:56|| 2023-05-28 09:56|| Front Page Top

#6 /\ Went to Pikes the other day for some sod. Saw 10-10-10 for sale for $47. per bag.

Transitory ?

Posted by Besoeker 2023-05-28 10:01|| 2023-05-28 10:01|| Front Page Top

#7 They could 'Drill, Baby, Drill' and actually have an impact but their religion prohibits them from the obvious.

Posted by Procopius2k 2023-05-28 10:30|| 2023-05-28 10:30|| Front Page Top

Keep your eyes on that kurva hack Janet Yellen.

And maybe even one eye on her hubby, George Akerlof, who is on the advisory board of the Institute for New Economic Thinking, which was co-founded by one George Soros.

Posted by DooDahMan 2023-05-28 10:30|| 2023-05-28 10:30|| Front Page Top

#9 Bud Lite is driving down the inflation numbers.

Posted by Super Hose 2023-05-28 10:39|| 2023-05-28 10:39|| Front Page Top

#10 I admit I haven't checked on this, but I recently heard that the Fed redefined what M2 is and moved some of the criteria into M1.

The Fed's printing press has been, up until a little after the Fauci Flu fiasco, been running full steam ahead for many years and many presidents. So, where was the inflation 10 years ago if the Fed was printing so much? If the money was simply parked at the Fed, it never got into the economy as a whole. I guess that's where the velocity of money (M2) comes in, and M2 had been declining for years.

Now, throw in demand inflation (thanks again to the response to the Fauci Flu and this clownish Administration) along with interest rates suppressed for about ten years, it was only a matter of time.

That was one reason these banks have been failing. They bought millions/billions worth of long-term US Treasuries with a yield of, like, 1-2%. With deposits dropping like a rock, to meet those demands for withdrawals, the banks had to sell those long-term Treasuries on the secondary market at a loss (yields go up, prices of T-Bills and T-Bonds go down) and could no longer defer the losses on their "hold to maturity" assets on their balance sheets.

Posted by DooDahMan 2023-05-28 11:00|| 2023-05-28 11:00|| Front Page Top

#11 @#9 - There's a Breitbart article mentioning that a case of that swill is going for $3.49, about 15¢/can.

Posted by DooDahMan 2023-05-28 11:03|| 2023-05-28 11:03|| Front Page Top

#12 #10 Doo Dah Man: "With deposits dropping like a rock, to meet those demands for withdrawals, the banks had to sell those long-term Treasuries on the secondary market at a loss "

Here's what I don't get. These types if illiquid situations (NOT insolvency--that's different) are where the Fed is supposed to step in and lend money to the bank under Reg A. The biggest mystery to me is why SVB and First Republic didn't just go to the Fed's discount window and borrow the money to pay the depositors. They don't HAVE to sell the bonds and realize the loss. They can borrow and ride out the storm until the Fed lowers rates again and their bonds are up to par again.

The FDIC swooping in and taking over has to be more than this...and no one has said boo, as far as I know.

Posted by Tom 2023-05-28 13:53|| 2023-05-28 13:53|| Front Page Top

#13 doo

Yes there was a change if definition in May 2020.
Before that Saving's Deposits were not considered M1, after that they were M1.

It didn't change the aggregates much. People simply haven't been putting their money into regular savings deposits very much since the 70s-80s inflation years and instead buy 1 or 3 or 6 month CDs or various 'preferred savings'.

Posted by lord garth 2023-05-28 14:47|| 2023-05-28 14:47|| Front Page Top

#14 Who was talking economic turnaround?

Posted by swksvolFF 2023-05-28 18:19|| 2023-05-28 18:19|| Front Page Top

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