Posted on 04/12/2023 6:14:51 AM PDT by Kaiser8408a
US Core inflation keeps rising despite The Federal Reserve slowing M2 Money growth and raising The Fed Funds Targget rate as The Fed plays catch up from Janet Yellen’s “Too Low For Too Long” monetary policies under Obama. And she was … negligent.
US Core Inflation (Core CPI YoY) rose to 5.6% in March despite The Fed cranking up their target rate and rapidly withdrawing M2 Money.
Here is the CPI report for March. At least energy prices are down, but shelter is up 8.2% YoY and food is up 8.5% YoY.
One reason that core inflation is still rising is that The Fed still has not raised rates sufficiently. According to the Taylor Rule, the Fed Funds Target rate should be 11.77% based on core inflation of 5.6%. Hey, The Fed isn’t even half way there. It is like the Doolittle Raiders in World War II dropping their bombs 100 miles off the Japanese coast well short of their target.
Fed Funds Futures are pricing in one more rate hike (and a small one at that) before they resume cutting rates again.
Is The Fed chicken?
(Excerpt) Read more at confoundedinterest.net ...
Inflation is more likely around 17%, and the Fed/Biden will only make it worse.
Not sure how cutting rates, which will cause massive unemployment, helps Biden.
It is now federal policy to prop up Wall Street by keeping interest rates so low that money deposited in a bank continuously loses buying power.
To prevent human bank depositors on average from losing buying power, the interest rate should be ~ the inflation rate/(.78). This would be around 7%. The bank would need to add about 2% to 3% for operating costs, bad loan coverage and profit.
“The Fed will cut rates to protect Biden for reelection.”
People know this, so housing prices are not likely to drop much.
I think they will eventually...but not for a couple of months.
In order to get inflation down, the rates need to be higher than the PPI. Now, we may see some improvement THIS month—but that is going to be short lived. The cost of energy is going back up and that causes the prices of everything to rise.
If the Fed starts cutting too soon—inflation is going to get out of hand again.
The Saudis are not Biden’s friends. They will screw him bad next year. If it did not hurt my wallet so much, I would say it will be fun to watch.
This is NOT a rates % inflation.
Extremely poor characterization.
Not to protect Biden for reelection but another lesson on how to eat s**t and like it.
81.000.000 voters take a bow.
The idea behind raising interest rates is sound and it works. It makes money scarce because fewer people and businesses borrow money at higher interest rates. In turn, that reduces purchases of large ticket items. Ultimately it leads to unemployment because business slows. Raising interest rates primarily affects the private sector - you and me.
There is an alternative and/or complimentary approach to raising interest rates. That is cutting government spending. The source of excess money in the economy at the moment is not a result of a business cycle. It is government spending and printing money to accommodate the lack of revenue (taxes) to provide the dollars for government spending.
Cutting government spending has consequences. It can make government smaller. It can reduce the weaponization of government. It can force able bodied people on the government dole to work. It can force lazy ass government employees to actually work, not in government, but in the private sector. It will increase freedom.
Which do you want, hard working Americans in the private sector losing their jobs or lazy ass government employees losing theirs?
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