Inflation at 0.1% for November (Updated)

I feel like they should only do 25 BPs for the next 2 months then maybe pause. It's our best shot at a minimal recession.
But I also would not be against it if they took your approach.

Once again, I don't have faith in the fed.

They are sitting on over 8 trillion in total securities. They have to start unloading that. They have to do it slowly. I wonder if they will get back to pre-pandemic levels.

 

Food/groceries just now started to show a decline.

We don't want negative. That would be bad.
Wage growth was catching up but it's starting to fall again. That is a problem but it's a sign of recession. But wages will eventually catch up.

 

Yeah I think a quarter point today would be best, but I bet they go through with a half point because that's what they do.

 

Feds to do 50 BPs... sad man.

 

They just want to grind it all to dust.

Give no air for a soft landing. Screw employment. Only complete suffocation will satisfy.

Hold your powder for another 1-2 years. Growth will return eventually.

I'm really sorry for anyone wanting to retire.

 

I don’t think the Fed is unjustified here with these hikes and projection of further hikes into next year. Just know that they helped set the stage for this with their malfeasance a year ago. It’s still not even been a year since rates were at 0. Let that sink in….

 

I agree with the Fed. Don’t let up.

 

From fish management to intertest rates, our government is fantastic at two things. Being late to the party then implementing extreme over corrections. Just par for the course.

 

I think I agree with Kevin Drum, although it goes against every instinct to disagree with the opinions of those that know the most with the most expertise (the Fed)

It’s time to change our minds about the cause of our current bout of inflation - Kevin Drum

 

Inflation is still at 40-year-highs. This thread has nothing to brag about. It’s a disgrace. The Fed is killing the economy. Imagine trying to buy your first home with those rates. The Fed is a scam.

 

Dow -920 as investors fear the Fed is tipping our economy into recession.

 

I don’t agree with that at all.

There is little doubt that the huge fiscal stimulus played a role. Combine that with supply issues and Ukraine war and inflation got momentum. Now you have to break the momentum. I don’t think based on a couple of month over month decent numbers do you declare victory. It isn’t like 4.5% interest rates are historically backbreaking. You want to get it right the first time. You ease off too soon and get a rebound then it gets harder to address. By all accounts the economy and jobs are still in good shape so the risk of easing too soon exceeds the risk of holding too long.

 

I didn't read it is saying teh stimulus didn't play a role but that we calibrated it relatively correctly so that the inflation would be temporary rather than requiring a recession to break. Obviously we don't know yet what the that will be the case, is looking better by the day. I read have the same that we got the stimulus just about right two months, but not so much as to ignite inflation. And Powell talked about going to 5.25%

 

I don’t think we got the stimulus right because not only did it result in a substantial increase in retail sales of some types, but also lead to a substantial increase in individual savings. If the stimulus were correct you wouldn’t have seen stock market and real estate bubbles. I realize it’s armchair qb’ing and I’m not overly blaming those for being excessively proactive because they were unprecedented times, but we have to honest about the impacts if we want to learn from it and enact corrective policy.

This may or may not resemble the 70’s but we never followed through and put inflation to bed. We don’t want to replicate that. Plus I don’t think 5% interest rates are oppressive, and starting to reduce our multi trillion of fed holdings seems like a reasonable thing to do. We’ve come to think that ZIRP is normal, and it isn’t.

 

Great article. This is what I’ve been saying for years on here. The stimulus blame is a joke.

I’ll go one further and break down my estimate that:

Energy and Transportation added 2% to costs. Supply constraints added 3%. Resellers added 3% for profit. Stimulus added zero to inflation.

My point of view is informed by my experience with consumer costs and purchases.

 

I'm not certain I agree that the stimulus added nothing. I said from the beginning that I thought it added 1 to 2 points.

While it's too early to draw firm conclusions, inflation went up much faster than I expected and is similarly coming down much faster than I expected.

I've already looked foolish with some of my predictions the beginning. But if this maintains, I think we can safely say that the stimulus didn't add anything that could not be remedied that would suggest that it was not a wise policy choice