from Yahoo Finance
A Guns, Not Butter World Will Mean Higher Inflation
The macro backdrop looks set to be very different to both the post-2008 and pre-2008 eras.
by John Stepek
Bloomberg.com
A brief and depressing romp
As expected, the Bank of England has cut the UK’s key interest rate to 4.75%. The decision was almost unanimous — there was one hold-out, with Catherine Mann, ever the inflation hawk, opting for no cut.
The accompanying notes show that the Bank now expects inflation to peak at a higher rate than it otherwise would have, as a result of the budget.
But what’s probably more important is what comes out at the press conference, which is warming up even as today’s letter goes to press. Keep an eye on my colleagues over at the Markets Today blog for more as it comes through.
Inflation May Have Cost Kamala Harris the White House
Even though inflation has slowed, prices have remained high, and people hate high prices.
by Arthur Delaney
The Huffington Post
Higher consumer prices may be the single biggest contributing factor to the resounding defeat of Vice President Kamala Harris by former president Donald Trump in Tuesday’s presidential election.
Voters have consistently rated the economy as the most important issue in the election, and two-thirds of voters surveyed after casting their ballots said they considered the economy “not so good” or “poor.” And of the 31% of voters who told exit pollsters the economy was their top concern, 79% voted for Trump.
By most measures, the economy is doing well ? unemployment is historically low, at 4.1%, the stock market is booming, the country’s gross domestic product remains the envy of the world, and inflation has actually fallen to similar levels in Trump’s first term.
The Latest Inflation Woe: Your Fast-Food Breakfast Now Costs 53% More
Prices for the morning meal have surged over the past five years, according to a new study
by Charles Passy
Market Watch
A newly released study from the personal-finance site FinanceBuzz found that breakfast menu-item prices at 10 of the most popular fast-food chains have increased by 53% since 2019. And in some cases, the spikes are much higher: At Taco Bell and CKE Restaurants (Hardee’s and Carl’s Jr.), prices for morning fare have jumped by 72%.
Other chains have had lower increases, of course. At Subway, the hike over that five-year period is 37% and at Starbucks, it’s 32%. But even in these instances, the increases still outpace the rate of inflation since 2019, which is 23%, according to the federal Bureau of Labor Statistics.
The FinanceBuzz data looked at popular breakfast offerings, such as egg sandwiches and bagels. Coffee was not included as part of its study.
The Damage Done by Our Inflationist Regime
by Brendan Brown
Mises.org
Economist Brendan Brown answered our questions about interest rates, the carry trade, and why the Federal Reserve won’t fix our inflationary malaise.
The Misesian (TM): Much of your work at mises.org has examined the many ways that monetary inflation creates various types of bubbles fueled by speculative narratives. They’re different with each business cycle, though. What do you see as some of the biggest bubbles out there right now?
Brendan Brown (BB): I think of bubbles as an extreme phenomenon. They are prone to develop in noncore markets under those types of severe monetary inflation where asset inflation, rather than reported inflation in goods markets, is the starkest symptom. (These episodes usually feature strong coincident nonmonetary downward influences on prices). Bubble-like qualities can also extend to some especially hot segments of core markets.
Trump Ran On Fighting Inflation, but Investors Are Betting He’ll Make it Worse
Donald Trump’s second-term policies are seen by investors as posing potential threats to the fight on inflation.
by Diccon Hyatt
Investopedia
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President-elect Donald Trump won his second term in office Tuesday after promising to fight the inflation that has hammered household budgets since 2021—however, financial markets are betting he’ll make it worse instead.
Yields on 10-year Treasurys surged Wednesday in the wake of Trump’s victory, rising as high as 4.47%, their highest level since July. Treasury yields tend to be heavily influenced by investor concerns about inflation, with higher yields signaling concerns about greater inflation risks ahead. Economists widely believe several of Trump’s policy proposals—especially his tariffs on imports—could accelerate the rising cost of living.
“We expect tariffs and tax policy will be the focus for economic policy early in a second Trump administration,” David Seif, chief economist for developed markets at Nomura, wrote in a commentary. “Tariffs are likely to be inflationary and negative for growth.”
Voters Voiced Frustration Over Inflation. Some Economists Expect Trump’s Policies to Worsen It.
Expanded tariffs and mass deportations would raise prices, some experts say.
[Ed. Note: “mass deportations would raise prices”… said no previous economist EVER.]
by Max Zahn
ABC News
Voters swept President-elect Donald Trump back into office on what appears to be a swell of discontent over the state of the U.S. economy.
More than two-thirds of voters say the economy is in bad shape, according to the preliminary results of an ABC News exit poll. Forty-five percent of voters say their own financial situation is worse now than it was four years ago, which exceeds the share who held that view in the immediate wake of the Great Recession in 2008, the poll found.
Yet despite their frustrations about the cost of living, voters elected a candidate whose economic policies are widely expected to worsen inflation and hammer household budgets, experts told ABC News.
Trump’s proposals of heightened tariffs and the mass deportation of undocumented immigrants could raise prices for everything from coffee to bananas to smartphones, experts said.
The Inflation Election
Elections are decided by how people feel, and lots of Americans still feel pretty grumpy about how much it costs to go to the grocery store these days.
by Eric Boehm
Reason.com
In retrospect, the most important incident along the road to this Election Day may not have been the Democratic Party’s decision to shove aside President Joe Biden, or the unprecedented (and undemocratic) elevation of Vice President Kamala Harris to the top of the ticket. It wasn’t the Republican Party’s inability to break out of the thrall that Donald Trump holds over it, or the two assassination attempts aimed at him.
The thing that most shaped this election happened long before all that. It was a decision made in the early days of the Biden administration. With the last election barely in the rearview window, Biden pushed a major stimulus bill through Congress—a bill that spent $1.9 trillion, nearly all of it borrowed—despite warning signs that the already recovering economy might not be able to handle the full-throttle infusion of more dollars.
Voter Survey: Harris Voters Motivated by Democracy, Trump Supporters by Inflation and Immigration
by Josh Boak and Linley Sanders
LA Times
WASHINGTON — Voters for Kamala Harris and Donald Trump who cast their ballots for Tuesday’s presidential election had vastly different motivations — reflecting a broader national divide on the problems the United States faces.
AP VoteCast, an expansive survey of more than 110,000 voters nationwide, found a country mired in negativity and desperate for change as Americans faced a stark choice between former President Trump and Vice President Kamala Harris. It found that the fate of democracy appeared to be a primary driver for Harris’ supporters. It was a sign that the Democratic nominee’s persistent messaging in her campaign’s closing days accusing Trump of being a fascist may have broken through.
By contrast, Trump’s supporters were largely focused on immigration and inflation — two issues that the former Republican president has been hammering since the start of his campaign. Trump has pledged that tariffs would bring back factory jobs and that greater domestic oil production would flow through the economy and lower prices.
Poor Americans Disproportionately Crushed by Biden-Harris Inflation
by Austin Gae
The Heritage Foundation
All Americans are facing rising prices under the Biden-Harris administration, despite its claim that it’s “fighting to lower costs,” but the burden of soaring costs falls disproportionately on low-income families.
They spend a higher share of their income on necessities such as food and energy, which have seen above-average inflation. And since they already tend to buy the cheapest brands, they have far fewer low-cost alternatives.
A simple trip to the grocery store will frustrate many Americans. Since January 2021, the price of cereal and bakery goods has risen 25%, and chicken, the most common meat, has increased by 24%. As you head back home, you realize your car needs refueling, only to find yourself paying 45% more at the pump. You arrive home and turn on the lights, knowing that your electricity bill will be 31% more than it used to.
Here’s Why You Can’t Blame Presidents for Inflation
by Janet Nguyen
Market Place
During the worst of the pandemic, prices started rising everywhere. Groceries, cars (both new and used), gasoline, housing. At one point, inflation reached 9.1%, the highest level since 1981, although it’s since cooled down.
When things get more expensive, some want to blame the current presidential administration. Former president Donald Trump said both President Joe Biden and Vice President Kamala Harris were responsible for the record levels of inflation that consumers saw in recent years.
But presidential policies did not drive the record inflation we saw during the pandemic, economists told Marketplace.
“I think that people generally over attribute control over the macroeconomy to presidents,” said Tyler Schipper, an associate professor of economics at the University of St. Thomas.