Posted on 02/20/2018 1:18:04 PM PST by SeekAndFind
J.P. Morgan slashed expectations for U.S. economic growth in the first quarter thanks to Wednesday's "hotter than Hades" inflation reading and "ugly" retail sales numbers.
The bank's chief U.S. economist explained that the Labor Department's "scorching" core consumer price index measure likely means an emboldened Federal Reserve.
"While it is still early going, we are taking down our outlook for first-quarter gross domestic product from 3.0 percent to 2.5 percent," wrote economist Michael Feroli. "Today's inflation reading should probably cement in place the Fed's intent to hike rates at the March FOMC meeting."
The economist added that core CPI posted a 0.349 percent monthly gain, its largest month-over-month gain since 2005. Though economists across Wall Street have differed on how many times the central bank is likely to raise rates in 2018, the odds of a March rate hike are now over 80 percent, according to the CME FedWatch tool.
The Atlanta Fed also lowered its projection on Wednesday, calling for growth of 3.2 percent in the first quarter versus prior expectations of 4 percent on Feb. 9.
Inflation fears have spooked investors in recent weeks after a strong January jobs report ignited interest rates and sent the Dow Jones industrial average and the S&P 500 into correction territory. Classical economics holds that excessive fiscal stimulus in the form of tax cuts or government spending temporarily elevates GDP while prices adjust to catch up to increased output.
"We now also think the odds are moving up that [the Fed's bankers] also revise their guidance at that [March] meeting from looking for three hikes this year to four, aligning with our view," Feroli added.
But inflation can also hurt consumer spending as prices rise.
(Excerpt) Read more at cnbc.com ...
As if growth is Leprosy to a Capitalist society...
Leftists would love everyone to live on a garbage heap (but them) in order to make a political point.
I was rooting like Hell for Obama’s policies to fail badly, but it was because I knew they were BAD for our country.
Leftists see this quite differently.
It is going to be interesting. Supply side tax cuts plus Keynesian pump priming on top of a already strong economy. I will not even venture a guess how it turns out.
I agree with your thoughts there.
We’ve got businesses expanding, hiring many new people, giving raises and bonuses, other perks too, and now after a nearly 20 year drought in these sorts of things, the Left wants to destroy it.
The Leftists are hell bent to destroy this nation.
Seems to me you make the case, then give them 18 months to relocate overseas before prosecutions begin.
One, I wouldn’t trust a thing JP Morgan has to opine on.
Second, inflation as a result of robust economy is something we should be cheering about, rather than inflation caused by irresponsible monetary expansion.
I’m not in the least bit worried. The only thing that caused me SOME caution is inflated housing prices this stage in the game.
I believe this with all my heart: Real conservatives don’t have wealth envy. We celebrate people who have worked hard and earned the fiscal benefits of doing so. We aspire to do the same if we can, and if we can’t, we recognize that with equal work, not every outcome will be the same.
The Left doesn’t do that. Everything is about envy. Race envy. Money envy. Fun envy. Sex envy. If EVERYONE can’t have a beachfront home (except them and their fellow elites, of course) then NOBODY should have a beachfront home.
God, how I despise Leftism.
There’s a lot of truth in that.
I have family members that were able to purchase homes. Their marriages were stable enough where the two of them could pull together and make things happen.
That didn’t happen for me. It could have, but the two people in my life used the prospect of better times just ahead, to see it as an opportunity to shake things up.
I’m not angry at them. I’m very happy for my family members.
Life is what it is. You decide to be happy or you decide not to be.
When I was trying to instill this in two others in my life, they wouldn’t listen.
As for people who are wealthy, I enjoy seeing their lifestyle. I don’t compare my circumstances to them.
I don’t go home from nice places and grind over the idea my place isn’t as nice.
I would like someday to become wealthy, and so I treat the wealthy with respect. They found a way to build wealthy where I didn’t. That one thing about them is what I envy.
There isn’t a snowball’s chance in hell of me demanding new taxes or some other sort of attachments to their wealth. And when they die, I want 100% of what they had accumulated handed down to their kids.
I’m very against the concept of wealth redistribution in any form.
If people want more in their life, they need to get off their ass and hustle. That includes me.
Great post. That is exactly the mindset I subscribe to.
Remember when Demonrats said that?
Now their elitist pals are doing it.
January had 2 reasons for low retail sales and price spikes..winter and the spike in oil prices because of winter
A “scorching hot” inflation report might be an honest one that reflects the true cost of living. It’s truly hard to believe that the reported inflation for the past decade has been the same as the out of pocket people have been experiencing.
Spot on, Sam. Spot on!
No, and that has been a lifelong pet peeve for me. The posted inflation rates are a joke. Can’t eat an ipad, and rarely need more than one. Food prices have been running at least at 10% per year inflation. The website Shadow Statistics gives a good recounting why federal posted inflation rates are a sham.
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