from WallStForMainSt
CNBC Daily Open: Stubborn Inflation Complicates Rate-Cut Plan
by Sumathi Bala
CNBC.com
What you need to know today
Wall Street lower
U.S. stocks closed lower Monday taking a breather from a rally sparked last week after the Federal Reserve stuck to its rate-cut forecast. The 30-stock Dow
lost more than 150 points to dip 0.4%, while the S&P 500 and Nasdaq Composite fell around 0.3% each. Bitcoin, meanwhile, jumped 7% to retake the $70,000 level.
FTX to sell AI startup stake
Bankrupt crypto exchange FTX is selling its majority stake in AI startup Anthropic for $884 million, according to a court filing. The bulk of the stake is going to ATIC Third International Investment — a group aligned with a UAE sovereign wealth fund Mubadala. Other investors include Jane Street, venture fund HOF Capital, the Ford Foundation and funds managed by Fidelity.
Gold Holds Near Record High Ahead of U.S. Inflation Data Release
by Sybilla Gross
Yahoo! Finance
[…] The core personal consumption expenditures index, to drop on Good Friday, is expected to show inflation probably remained uncomfortably high in February. That could hinder plans by US policymakers to implement three interest rate cuts this year. Lower borrowing costs typically benefit the precious metal, which doesn’t yield interest.
Swaps markets trimmed wagers for a rate reduction in June to 65% from 69% late last week, after Fed Bank of Atlanta President Raphael Bostic on Monday reiterated his expectation for just one cut this year. Still, gold remains near an all-time high amid building momentum surrounding the central bank’s long-awaited pivot to monetary easing.
Climate Change Driving Up Inflation in Food Prices: Study
[Ed. Note: Yeah, that sounds perfectly credible. It’s that 0.03 extra degrees causing it. Uh huh. Go on.]
by Zack Budryk
The Hill
Rising global temperatures are associated with inflation in food prices, both in regions that are already hotter and in countries outside the tropics like the U.S., according to a study published in the journal Communications Earth & Environment.
Researchers from the Potsdam Institute for Climate Impact Research and the European Central Bank studied monthly price indexes between 1996 and 2021 in 121 countries. The study found food prices are the monthly inflation signal most strongly associated with the climate, which researchers attributed to the supply shocks associated with temperature increases. Both new milestones for extreme heat and shifts in average temperatures are associated with longer-term inflation. In European countries, where the summer of 2022 broke temperature records, that heat was accompanied by food inflation increases of 0.43 percentage points to 0.93 percentage points.
Why Everything Still Feels Expensive Even as Inflation Cools
by John Jennings
Forbes
Inflation has been brutal over the past few years. After decades of running below 3%, in early 2021, inflation increased rapidly as the economy began opening back up after the COVID-19 lockdowns. It peaked at 9.1% in June 2022 and has declined to its current level of 3.2%. While a 3.2% inflation rate is unquestionably better than it’s been since early 2021, it is still materially above the Federal Reserve’s 2% inflation target.
[…] Even though inflation has cooled dramatically, when I went to the grocery store this weekend to pick up a few items, I was surprised at how much my few bags of groceries cost. If inflation has been declining, why does everything still seem so expensive?
An Inflation Wave is Hitting That Will Terrify Already Shattered Consumers
from King World News
An inflation wave is hitting that will terrify already shattered consumers.
Another Inflation Wave Is Hitting
March 25 (King World News) – Peter Boockvar: In last week’s Fed dots, there were two people that wanted just one rate cut this year (also two that wanted none and I’m guessing Michelle Bowman was one of them) and notably one of them is a voting member it seems, the Atlanta president Raphael Bostic. He was also the one who warned us a few weeks ago about the pent up animal spirits that would be unleashed upon rate cuts.
Immigration Bigger Issue than Inflation, Economy
by Neil Munro
Breitbart.com
President Joe Biden’s easy-migration policies are the top issue facing the United States, according to the latest Harvard Harris poll.
Immigration — not inflation or the economy — was cited as the top issue among 36 percent of 2,111 registered voters in the March 20-21 poll from Harvard’s Center for American Political Studies.
Thirty-six percent tagged immigration as the top issue, while 33 percent tagged inflation. Twenty-three percent picked the “economy and jobs” category.
Demographically, 39 percent of whites, 41 percent of Hispanics, 28 percent of Asians, and 28 percent of people aged 25 to 34 chose immigration.
Summers: Inflation Reached 18% in 2022 Using the Government’s Previous Formula
by Avik Roy
Forbes
Numerous commentators—especially those defending President Biden’s economic record—have puzzled over why Americans are sour about the state of the U.S. economy. Unemployment rates have returned to pre-pandemic lows, they correctly point out, and the official rate of inflation is declining. So why are Americans ignoring the view of many experts that the economy is doing well?
According to a striking new paper by a group of economists from Harvard and the International Monetary Fund, headlined by former Treasury Secretary Larry Summers, the answer is that Americans have figured out something that the experts have ignored: that rising interest rates are as much a part of inflation as the rising price of ordinary goods. “Concerns over borrowing costs, which have historically tracked the cost of money, are at their highest levels” since the early 1980s, they write. “Alternative measures of inflation that include borrowing costs” account for most of the gap between the experts’ rosy pictures and Americans’ skeptical assessment.
The Insanity in Our World is Driven by Money Printing
Fix the Money, Fix the World
by Marty Bent
Bombthrower
This chart has been making the rounds on Twitter this week and I think it’s a good image to send you freaks into the weekend with. It’s easy to get swept up in the chaos of the day-to-day volatility that exists in our world. Recently, our minds have been inundated with headlines about illegal immigration, squatters and the degradation of private property rights, war across the world, small battles within the larger “culture war”, increasing prices, and the decisions made by central banks around the world. In the midst of all of this chaos it is important to take a step back and remind yourself of what lies at the core of most of these issues; the fact that we’ve completely broken money.
Fed’s Powell Ready to Support Job Market, Even if it Means Lingering Inflation
by Rich Miller, Bloomberg News
BNN Bloomberg
(Bloomberg) — As inflation surged in 2022, the Federal Reserve moved to prevent a wage-hike spiral by jacking up interest rates. Now, with unemployment edging up, the central bank is signaling a willingness to cut rates to head off a job-cutting spiral – even if that means somewhat higher inflation for a while.
For the first time in the current economic upswing, Fed Chair Jerome Powell used his opening statement at Wednesday’s press conference to declare that a surprise increase in unemployment could prompt the Fed to lower rates. He then repeated that message several times in response to reporters’ questions.
While the Fed is waiting to be sure its inflation battle is won before cutting rates, “an unexpected weakening in the labor market could also warrant a policy response,” he said after its two-day policy meeting.
Summers: ‘Green Investments’ and Inflation Reduction Act Will Put Upward Pressure On Interest Rates
by Ian Hanchett
Breitbart.com
During an interview aired on Friday’s edition of Bloomberg’s “Wall Street Week,” Harvard Professor, economist, Director of the National Economic Council under President Barack Obama, and Treasury Secretary under President Bill Clinton Larry Summers stated that the “huge set of new private sector investments going on with respect to green investments and the IRA” will put upward pressure on interest rates.
Summers said that he finds the Federal Reserve’s belief “that the ultimate neutral rate is 2.6 to be bizarre in current circumstances. Here’s what we have relative to a few years ago, when they said it was 2.5: We’ve got fiscal policy in a much, much more expansionary place with much higher deficits, much larger role of debt.