US Q4 GDP Price Soars To 6.9% QoQ As Commodity Prices Skyrocket (10Y-2Y Treasury Curve Tanks)

Confounded Interest ^ | 01/27/2022 | Anthony B. Sanders

[Browns Ultra Fan]

Yes, The Federal Reserve could have raised their target rate at their January meeting, but chose not to raise rates. Instead, Chairman Powell said that rate increases are a comin’!

I hope Powell wasn’t hoping for a slowdown in inflation, because today’s Q4 GDP report showed a surge in GDP to 6.9% QoQ. But with that GDP surge we also got a surge in prices paid by consumers to 6.9% as well. Thanks to the continuing massive Federal stimulus being poured into markets.

Despite the positive news on Q4 GDP, we are still seeing 7% inflation and a diving 10Y-2Y yield curve.

Along with that surprising GDP report, we are seeing the Bloomberg Commodity Index rising like a bat out of hell (RIP, Meatloaf).

Powell apparently found paradise by the dashboard light. So, why rock the boat? Oh yes. INFLATION.

Should Powell be renamed Meatloaf?

[Browns Ultra Fan]

The Fed and Biden Administration should be held accountable for the massive inflation that are causing.

[Leaning Right]

> The Fed and Biden Administration should be held accountable for the massive inflation that are causing. <

The Democrats will blame this on Covid-related disruptions. And that would seem reasonable - until you remember that we also had Covid when Trump was in office.

So it’s not a Covid thing. It’s a Biden thing.

[crz]

“Despite the positive news on Q4 GDP, we are still seeing 7% inflation and a diving 10Y-2Y yield curve.”

Go back to how they figured it in the 80s and see what the inflation rate is.

Its over 12% I would bet.

[Vermont Lt]

I think there are several things at play here:

1. People bought early this year. I think this applied to individuals and businesses. The supply chain had an impact.

2. Inflation causes hording. This pulls forward the action from Q1. This will make “making your Q1 numbers” a little easier because you will save money on expendables.

3. Omicron is not an issue in Q4. It hit late in December and most everyone knows that nothing happens in the last week of December.

4. While “Real GDP” is discounted by inflation, we all know that real costs are much higher than the official inflation rate. So, the price of EVERYTHING went up, which would make the nominal GDP go up.

So sure, this was a fine number. But its going to look like crap Quarter to Quarter after March. And durable goods are down. The PPI is hot. The CPI will probably stay hot. And the money supply is still screaming. (And the infrastructure stimulus is still in the bank!)

https://fred.stlouisfed.org/series/M1SL

I’ve been saying this for a while. We are screwed.