from CNBC
Americans Are Still Really Worried About Inflation
And for good reason: Even at 3.5 percent, inflation is running higher than it did in almost every year for three decades before 2021.
by Eric Boehm
Reason.com
From President Joe Biden’s point of view, Americans ought to be thrilled with the recent trends in inflation.
“Wages keep going up and inflation keeps coming down,” the president victoriously declared at the State of the Union address in early March. The administration’s economic messaging has consistently stressed that lowering inflation is Biden’s “top economic priority” and that progress is being made toward the goal of taming price increases. “Inflation has fallen 60 percent from its peak,” the White House pointed out in a statement after the most recent Consumer Price Index report. “We’re making progress: wages are rising faster than prices, incomes are higher than before the pandemic, and unemployment has remained below 4% for the longest stretch in 50 years.”
Fed’s Williams Says 2% Inflation Target ‘Critical’
by Ann Saphir
Reuters.com
PALO ALTO, California, May 3 (Reuters) – The U.S. central bank’s 2% target for inflation is key to achieving price stability and essential for ensuring economic prosperity, New York Federal Reserve Bank President John Williams said on Friday.
His defense of the inflation target comes amid persistent calls from some corners for the Fed to overhaul the way it guides, sets and communicates policy.
“Theory and experience have also shown the importance of transparency and clear communication, including setting an explicit, numerical longer-run inflation target, and of taking appropriate actions to support the achievement of that goal,” Williams told a monetary policy conference at Stanford University’s Hoover Institution. “These are critical in anchoring inflation expectations, which, in turn, help keep inflation at the target.”
The Reasons the Fed’s Bowman is “Willing” to Hike Rates if “Data Indicate Progress On Inflation Has Stalled or Reversed”
by Wolf Richter
Wolf Street
She nails it with her list of inflation-fueling factors. It parallels what Powell said more softly at the press conference.
The first three months of the year have produced a nasty re-acceleration of inflation in the US. It was across the board: in the Consumer Price Index, in the Fed-favored PCE price index, in the Producer Price Index, in the quarterly Employment Cost Index (for two quarters in a row). The Fed is beginning to adjust to this new scenario, and a rate hike — instead of rate cuts — is now back on the table and keeps getting talked about.
Even – or especially? – after looking at the results of the jobs report on Friday, Fed Governor Michelle Bowman said in a speech that she remains “willing to raise the federal funds rate at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed.” This parallels what Powell said more softly at the FOMC post-meeting press conference. No disagreement there.
Inflation is Transitory Again
by David Haggith
GoldSeek
As Powell clasps his hands in desperate hope without any evidence to back his hope, the US Treasurer today, like the Treasurer in yesteryear, is giving a solid thumbs-up to his plan, which is already accomplishing everything the Treasury desperately needed.
After yesterday’s low “jobless claims” report that held unemployment steady and that looked rigged to hit a targeted goal (again), today delivered a “new jobs” report that came in (at 175,000 new jobs), well below expectations of 240,000. By that report, the unemployment rate ticked higher from 3.8% to 3.9%.
As I commented yesterday, we may be nearing the point where all the layoffs this year and last year are bringing jobs down enough to where they will finally start to come in line with available workers. Once that threshold is met, unemployment can rise when and if layoffs are higher than normal.
Globalist Magazine Admits Joe Biden’s Migration Spikes Inflation
by Neil Munro
Breitbart.com
President Joe Biden’s mass migration is raising inflation, chiefly by raising housing prices, according to the Economist, a U.K.-based pro-globalism magazine for elites.
Citizens’ rents, per-capita wages, and workplace productivity are being damaged in the United States, Australia, the United Kingdom, Canada, and other wealthy countries where governments are extracting migrants from developing countries, says the April 30 article, headlined “Immigration is surging, with big economic consequences.”
“Immigration’s impact goes well beyond an arithmetic effect on GDP [Gross Domestic Product] — it extends to inflation, living standards and government budgets,” the April 30 article admits as it debunks the elite narratives:
Peter Schiff: Fed is Still Clueless On Stagflation
by Peter Schiff
Schiff Sovereign
In June 2022, when inflation was raging at over 9% in the US, Fed Chairman Jerome Powell admitted to a reporter, “we now understand better how little we understand about inflation.”
“Uh, that’s not very reassuring,” the reporter chuckled.
Talk about an understatement. The Fed Chairman has the power to control virtually everything in the economy.
He can conjure trillions of dollars out of thin air practically at will. He can raise and lower interest rates, push businesses and governments into bankruptcy, and cause people to lose their jobs.
Yet he flat-out admitted they didn’t have a clue about inflation.
This Should Be a Five-Alarm Fire for Anyone Who Cares About Inflation
With the 2024 election approaching, the central bank’s independence is on the line.
by Catherine Rampell
Washington Post
Donald Trump, the presumed Republican presidential nominee, wants to kneecap the Federal Reserve. This should be a five-alarm fire for anyone who claims to care about inflation.
The former president and his advisers keep finding new ways to outdo themselves on bad economic ideas. Should Trump be granted a second term, he plans to slash the labor supply by ratcheting down immigration (including legal, work-authorized immigration). He wants to devalue the dollar. He’d levy worldwide tariffs of 10 percent or higher, plus perhaps a 100 percent tariff on some Chinese goods, apparently failing to notice that the costs of his previous tariffs fell almost entirely on American consumers.
Now, according to a Wall Street Journal scoop, Trump also wants to strip the Fed of its political independence. Proposed changes include enabling the president to fire the Fed chair at will, or even play a role in setting interest rates himself.
US Federal Reserve Holds Interest Rates Steady as Inflation Ticks Up
Fed announces it will keep interest rates at 5.25% to 5.5% as rate of inflation remains above target of 2%
by Lauren Aratani
The Guardian
The Federal Reserve announced on Wednesday that it is holding interest rates steady at 5.25% to 5.5%, their highest level in two decades, as inflation continues to dog the US economy.
Though some had hoped the Fed would soon cut interest rates, which are at their highest level since 2007, the annual rate of inflation has stubbornly remained above 3%. The Fed’s target rate is 2%.
“The committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%,” the Fed said in a statement that was largely unchanged from its statement after its previous meeting in March, when it also kept rates steady. “The committee will carefully assess incoming data, the evolving outlook, and the balance of risks.”
Breitbart Business Digest: The Fed Finally Realized Progress On Inflation Has Stalled
by John Carney
Breitbart.com
Inflation Also Rises: A Fed Story
The Federal Reserve admitted yesterday that progress on inflation has stalled and that it will take longer for the Fed to achieve the confidence it needs to cut interest rates.
The Fed’s official statement was expanded to include the statement that “in recent months, there has been a lack of further progress toward the Committee’s 2 percent inflation objective.” In the press conference, Federal Reserve Chairman Jerome Powell was even more explicit, going so far as to state that “further progress in bringing [inflation] down is not assured and the path forward is certain.”
It’s been quite a roller-coaster for the Fed. Last summer, Fed officials still believed that monetary policy was not sufficiently restrictive. At the June meeting, the Fed kept its benchmark federal funds rate unchanged at the range of five percent to 5.25 percent, but the median projection showed officials expected more hikes last year.
Expect Higher Interest Rates Through the End of 2024. Fed Blames ‘Lack of Progress’ On Inflation
You’ll likely pay more to borrow until at least 2025, but now may be the time to lock in higher savings rates.
by Richard Trenholm
c|net
Federal Reserve Chairman Jerome Powell had some sobering words for those anxiously anticipating rate cuts in 2024: “The path forward is uncertain.”
The Fed on Wednesday decided to hold the federal funds rate at a target range of 5.25% to 5.50% for the sixth straight time after three months of hotter-than-expected inflation reports. Inflation currently sits at 3.5% year over year, according to the Consumer Price Index’s April 10 report.
At previous meetings this year, Powell said the committee needed more data to make a decision and stuck to its forecast of three rate cuts “at some point this year.” But on Wednesday, Powell noted that a “lack of progress” on inflation in the first quarter could delay those cuts.