from WallStForMainSt
On Inflation Reduction Act Reform, Anything Short of Full Repeal is Failure
by Travis Fisher, Adam N. Michel, and Joshua Loucks
The CATO Institute
Full Republican control of Washington creates an opportunity to repeal many of the previous administration’s most costly laws and regulations. The misleadingly named Inflation Reduction Act (IRA) should be at the top of the list, not only because it is a disastrous environmental policy but also because it will be a necessary offset for a fiscally responsible extension of the expiring 2017 tax cuts.
The energy and climate provisions of the IRA are already burning through taxpayer dollars at rates much higher than initially projected. These subsidies will likely cost over $1 trillion by 2032 and as much as $4 trillion by 2050, and some of the most lucrative tax credits have no expiration date.
U.S. CPI Data Preview: Inflation Expected to Rebound for First Time in Seven Months
The US Consumer Price Index is set to rise 2.6% YoY in October, faster than September’s 2.4% increase.
by FXStreet Team
FX Street
The Consumer Price Index (CPI) inflation data from the United States (US) for October, published by the Bureau of Labor Statistics (BLS), is highly anticipated and slated for release on Wednesday at 13:30 GMT.
The US Dollar (USD) is set to rock on intense volatility likely to be spurred by the US inflation report, which could significantly impact the market’s pricing of the Federal Reserve (Fed) interest rate outlook for the coming months.
What to expect in the next CPI data report?
As measured by the CPI, inflation in the US is expected to increase at an annual rate of 2.6% in October, a tad higher than the 2.4% growth reported in September. The core annual CPI inflation, excluding volatile food and energy prices, will likely remain at 3.3% in the same period.
Biden’s Mistakes On the Economy Help Explain the 2024 Election
by Stuart Anderson
Forbes
Analysts say policy mistakes the Biden administration committed on the economy contributed to Donald Trump regaining the White House. However, not everyone agrees on which Biden actions were mistakes. Some argue, such as Sen. Bernie Sanders (I-VT), that if Joe Biden governed in a more populist fashion, his policies would have won over voters. Examining the record, it is unclear whether that assessment is accurate.
Voter Sentiment On The Economy
According to exit polls, voters decided the 2024 presidential election based on perceptions of the U.S. economy. “Widespread voter anger about the economy appeared to boost former president Donald Trump in Tuesday’s election, emerging as one of Democrats’ chief liabilities even with low unemployment and robust growth,” according to the Washington Post. “Two-thirds of voters rated the economy as ‘not so good’ or ‘poor,’ compared to just one-third who rated it as ‘excellent’ or ‘good,’ according to network exit polls. Of the voters who rated the economy negatively, 69% voted for Trump—a significant margin.”
Dollar Holds Firm Ahead of U.S. Inflation, Bitcoin Targets Fresh Highs
by Brigid Riley
USA Today
TOKYO – The U.S. dollar held near a 6-1/2-month peak against major peers and bitcoin was solidly poised just below record highs on Wednesday as markets sized up so-called Trump trades ahead of key U.S. inflation data later in the day.
The dollar is reaping the benefits of Republican Donald Trump’s victory in the U.S. presidential election last week, with investors pricing in policies of lower taxes and trade tariffs under the incoming administration that are seen as inflationary.
The Trump trade has pushed up U.S. Treasury yields as markets wager the Federal Reserve may temper the extent of its future rate cuts.
The President-elect’s Republican Party looks set to control both chambers of Congress when Trump takes office in January, Decision Desk HQ projected on Monday, enabling him to push an agenda of slashing taxes and shrinking the federal government.
CPI Inflation: What Another Bad Report May Mean For the Federal Reserve, S&P 500
by Jed Graham
Investor’s Business Daily
Wednesday’s consumer price index report for October is expected to show that core prices rose around 0.3% for a third straight month. That could add to uncertainty about another Federal Reserve rate cut in December and slow the S&P 500 Trump election rally.
Still, the stock market and the Fed have plenty of reason to take the CPI inflation data in stride. Most importantly, Fed Chairman Jerome Powell made a convincing case last week as to why inflation is on a clear track to fall to 2%, and he fully expects some bumps along the way.
[…] CPI Inflation Forecasts
The overall CPI is expected to rise 0.2% from September, as the 12-month headline inflation rate ticks up to 2.6% from 2.4%.
The expected 0.3% rise in core prices, excluding food and energy, would leave the 12-month core CPI inflation rate at 3.3%.
Fed’s Kashkari Says Trump Tariffs Could Reheat Inflation if They Provoke Global Trade ‘Tit for Tat’
Minneapolis Federal Reserve President Neel Kashkari said that tariffs would hurt long-term inflation if global trade partners were to strike back.
by Rebecca Picciotto
CNBC.com
Minneapolis Federal Reserve President Neel Kashkari said Sunday that President-elect Donald Trump’s tariff proposals could worsen long-term inflation if global trade partners were to strike back.
One-time tariffs, Kashkari said on CBS’ “Face the Nation,” “shouldn’t have an effect long run on inflation.”
“The challenge becomes, if there’s a tit for tat and it’s one country imposing tariffs and then responses and it’s escalating. That’s where it becomes more concerning, and, frankly, a lot more uncertain,” Kashkari said.
During his first term, Trump essentially sparked a trade war with China when he imposed a series of import taxes on Chinese goods, which triggered the country to retaliate with its own set of tariffs on the U.S.
Forecasts for October CPI Report Show Inflation Progress Stalling for Now
Analysts believe gas prices fell while used-car prices spiked.
by Sarah Hansen
Morningstar Advisor
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Forecasts for the October Consumer Price Index report show that inflation likely remained steady on a monthly basis in October, reflecting a pause in the good news on price pressures in the economy.
Analysts say falling gasoline prices during the month continued to pull down inflation overall, but rising prices in other areas offset some of that progress.
Investors are watching the data with renewed focus in the aftermath of last week’s presidential election, given the anticipated Republican policy proposals that economists think could exacerbate inflationary pressures. In recent weeks, bond traders have pushed bond yields higher, partly due to concerns about the longer-term inflation outlook.
U.S. Dollar Continues Gaining Ground as Markets Brace of U.S. Inflation Data
US Dollar gains on Monday with the DXY above 105.50.
by Patricio Martín
FX Street
The US Dollar Index (DXY), which measures the value of the USD against a basket of six currencies, is broadly gaining in Monday’s session. The focus for traders is now on the US inflation data for October, which will be released later this week. A strong inflation reading could further boost the US Dollar as it would increase expectations that the Federal Reserve (Fed) might slow the pace of interest rate easing.
The DXY initially rose last Friday after positive UoM consumer confidence data and the Federal Open Market Committee’s (FOMC) announcement of a 25 bps rate cut. Despite concerns over easing labor market conditions, the Fed expressed optimism about economic growth.
Inflation and Retail Sales Data Greet a Roaring Stock Market Rally: What to Know This Week
by Josh Schafer
Yahoo! Finance
Stocks just had their best week of 2024.
All three major indexes pressed to record highs after Donald Trump won the 2024 presidential election.
For the week, the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) rose more than 4.5%, while the Nasdaq Composite (^IXIC) rose nearly 6%.
In the week ahead, a fresh reading on inflation and retail sales will lead the economic calendar.
In corporate news, quarterly results from Home Depot (HD), Cisco (CSCO), and Disney (DIS) will highlight another week of earnings reports.
Donald Trump’s Victory and the Politics of Inflation
Joe Biden’s strong record on jobs and Kamala Harris’s vow to reduce the cost of living couldn’t prevent the Democrats from succumbing to a global anti-incumbency wave.
by John Cassidy
The New Yorker
In March, I was a guest at a dinner discussion organized by a progressive advocacy group in New York. As the talk turned to Joe Biden’s low approval ratings, another attendee brought up the skewed media coverage of the President’s economic record, which seemed to be a source of vexation for nearly everyone around the table. I readily agreed that positive news about jobs, G.D.P., and Biden’s efforts to stimulate manufacturing investment—of which there was plenty—wasn’t receiving as much attention as it deserved, particularly compared with the voluminous coverage of inflation. But I also pointed to governments from across the political spectrum in other countries, such as Britain, Germany, and France, that had experienced big rises in consumer prices. Inflation, it seemed, was poison for all incumbents, regardless of their location or political affiliation.
At that juncture, I was still hopeful that, with the U.S. inflation rate falling back toward pre-pandemic levels, there was enough time for public sentiment to shift, and for Biden’s approval ratings to recover. It never happened, of course. According to the network exit poll, conducted by Edison Research, seventy-five per cent of the voters in last week’s election said that inflation had caused them moderate or severe hardship during the past year, and of this group about two-thirds voted for Donald Trump.