Interview: Market Jitters as Fed’s Rate Cut Heightens Inflation Concerns, Says Analyst
by Xinhua
News.cn
Even if the United States reaches an inflation rate of 2 percent, the purchasing power of the public, household inflation, and the overall purchasing power of money would not return to previous levels, a Turkish analyst said.
ISTANBUL, Sept. 24 (Xinhua) — Market participants remain uneasy as the U.S. Federal Reserve cut interest rates by 50 basis points on Wednesday, amidst growing uncertainties in the U.S. economy, said a Turkish analyst.
Typically, when markets receive more than expected — like a 50-basis point cut instead of a 25-basis point — it should generate positivity, Murat Tufan, an analyst with the EkoTurk broadcaster, told Xinhua in a recent interview.
Why China’s Economic Slowdown is Unlikely to Affect U.S. Inflation
by Josh Lipton and Madison Mills
Yahoo! Finance
Unlimited Co-founder, CEO, and chief investment officer Bob Elliott joins Josh Lipton and Madison Mills on Market Domination after last week’s rate cut to discuss some of the top stories of the day, including concerns about the Chinese economy and rising gold prices, breaking down what investors need to know.
Elliot tells investors the state of China’s economy is “not likely to have a meaningful impact on US inflation numbers ahead; when it comes to growth, the US economy is pretty insulated from Chinese growth and not likely to have much of an impact.”
In regard to the impact on oil prices, Elliot says, “We’re really in this range here on oil (CL=F) where we’re not likely to see meaningfully more elevated oil prices, nor meaningfully lower oil prices ahead.
Days After Rate Cut, S&P’s Flash PMI Sees Rising Inflation and Exhorts the Fed to “Move Cautiously” with “Further Rate Cuts”
by Wolf Richter
Wolf Street
“The “reacceleration of inflation” suggests “the Fed cannot totally shift its focus away from its inflation target.”
Underlying inflationary dynamics are picking up steam, after having cooled a lot. Today, S&P’s preliminary Flash US Composite PMI (Purchasing Manager Index), based on data collected from September 12 through 20, entailed multiple warnings about the Fed’s future rate cuts, in light of reaccelerating selling-price inflation in both the services and manufacturing sectors, and in light of input-cost inflation in services.
Stagflation Economy: U.S. Manufacturing Collapse Remains as Stagflation Rules the Day
from King World News
As we kickoff another trading week, the US manufacturing collapse continues as stagflation rules the day.
September 23 (King World News) – Peter Boockvar: The September US PMI fell a touch to 54.4 from 54.6 with manufacturing remaining weak at 47 vs 47.9 in August, the slowest since June 2023…
US Manufacturing Collapse Remains As Stagflation Rules The Day
Cheapflation and the Rise of Inflation Inequality in 2021-2023
by Tao Chen, Peter Levell, and Martin O’Connell
CEPR
Inflation rates soared over the period 2021-2023, driving down households’ real incomes in the UK and other countries. This column uses detailed data on price and spending patterns for groceries to assess the relative impacts of inflation across rich and poor households. Significant differences in grocery price inflation experienced by rich and poor households only emerge once the most disaggregated product definitions are used. Price increases were disproportionately large for individual varieties of products that were initially cheaper (‘cheapflation’), driving up inflation rates for worse-off households.
Fed Cuts 0.5%, Gold Makes a New High, and Dollar Confidence Collapses
Gold prices hit new highs amid declining confidence in the USD, as capital flows shift away from the dollar. The Fed’s rate cut sparks concerns over potential election interference.
by Dave Fairtex
Chris Martenson’s Peak Prosperity
I took a peek down the inflation rabbit hole this week because some folks thought that the tiny increase in Retail Sales was fantastic (because – dropping prices!). Unfortunately, those “dropping prices” metrics were provided by the BLS. John Williams at shadowstats.com provides a CPI that’s calculated using the same method used back in the Carter days. Carter (probably) lost the 1980 election because of the then-15% inflation, so his successors (appear to have) progressively “fixed” inflation calculations so this unfortunate reveal wouldn’t happen again. Call it: government-gaslighting, which has just grown worse over time, as revealed to us by John Williams. Long story short: inflation is massively underestimated by about 6-8% annually, vs calculations used in Carter-1980. As a result, the Fed’s “2% inflation target” is actually a 9% inflation target. Quite literally, “the system” has been busy making sure that “You Will Own Nothing” over the past 20 years. And if you do accidentally own something – cap gains taxes will “fix” the problem. “Sell your Dad’s farm to pay the taxes – to Billy Gates who got even richer off the DeathVax!”
The Yield Curve Before & After the Rate Cut: Why Have Longer-Term Yields Risen since the Rate Cut? Already Priced in? Inflation Concerns as Policy Loosens in a Decent Economy?
by Wolf Richter
Wolf Street
Mortgage rates also ticked up.
The Treasury yield curve is un-inverting piece by piece, but not in the way future homebuyers want: before and since the rate cut, shorter-term Treasury yields have fallen, driven by the Fed’s actual and expected rate cuts; but longer-term Treasury yields and mortgage rates have inched up.
As shorter-term yields drop while longer-term yields rise – or fall more slowly than shorter-term yields – the yield curve un-inverts step by step and eventually enters its normal state where all shorter-term yields are lower than longer-term yields.
But it still has a long way to go before it’s un-inverted all the way, to where shorter-term yields are lower than longer-term yields across the yield curve.
Kamala Harris Sidesteps Economic Reality, Bizarrely Says She Will Lower Costs By Lowering Cost of Necessities
by Hannah Knudsen
Breitbart.com
Vice President Kamala Harris appeared to be stumped when asked how she would lower the cost of living as president, telling a couple during a Q&A with Oprah Winfrey that she would do so by “bringing down the cost of everyday necessities” despite the fact that the cost of many necessities — including groceries, which she mentioned — have skyrocketed under her leadership.
“We really would love to know what your plan is to help lower the cost of living,” the couple asked Harris, who immediately kicked off with a word salad, ignoring the actual question:
Gold Hits Another Record High, but Are We Looking at Deflation or Inflation in the Future?
from King World News
Today gold has hit another record high, but are we looking at deflation or inflation in the future?
September 20 (King World News) – Matthew Piepenburg, partner at VON GREYERZ AG: As a polarized U.S. marches toward a political, financial, and perhaps even military crossroads in the closing months 2024, many feel what George Lucas might otherwise describe as a “disturbance in the force.”
From blow-off market tops, empty political platitudes and an openly broken bond market to debased currencies and large swaths of the planet at war or inching toward escalation, it seems we are juggling aspects of the stupid, the broken, the insane and perhaps even…the evil.
Let’s start with the stupid…
Tim Walz Stumped By Question On Inflation; Repeats Lie About Trump ‘Sales Tax’
by Joel B. Pollak
Breitbart.com
Minnesota Gov. Tim Walz, the Democratic nominee for vice president, was stumped Tuesday when asked by a reporter to explain what he and Vice President Kamala Harris would do for families struggling financially.
In an interview with local Macon, Georgia, CBS affiliate WMAZ, Walz first said that he and Harris understood the problem because they are “middle class.”
[…] He then offered a series of her proposals unrelated to inflation:
I tell them Kamala Harris and I know something about it being middle-class folks. Our family sit at the table trying to pay the bill. We know coming out of the COVID pandemic with prices where they were, that people need to see some relief.
And I think that’s why Kamala Harris has put out a plan — especially around home ownership — making sure we’re building 3 million more affordable homes, making sure we’re making the down payment assistance there.