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Fed’s Barr: Inflation Data ‘Disappointing,’ Tight Policy Needs More Time

by Howard Schneider
Yahoo! Finance

AMELIA ISLAND, Florida (Reuters) – U.S. inflation data through the first months of 2024 has been “disappointing,” Fed vice chair for supervision Michael Barr said on Monday, leaving the central bank short of the evidence it needs to ease monetary policy.

“Inflation readings in the first quarter of this year were disappointing. These results did not provide me with the increased confidence that I was hoping to find to support easing monetary policy,” Barr said in remarks prepared for delivery at an Atlanta Federal Reserve conference on financial markets.

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RBA Resumes Rate-Hike Discussion On Renewed Inflation Concerns

by Swati Pandey
BNN Bloomberg

(Bloomberg) — Australia’s central bank resumed a discussion of interest-rate hikes at its May policy meeting before deciding that the case to stand pat was stronger as it aims to avoid “excessive fine tuning.”

Minutes of the Reserve Bank’s May 6-7 gathering showed the board discussed two options when it left the key rate at 4.35%, noting the risks around its economic forecasts were still “balanced” despite stronger-than-expected data in the run-up to the meeting.

The board “seems focused on looking through the ‘short-term variation in inflation to avoid excessive fine-tuning’,” said Belinda Allen, an economist at Commonwealth Bank of Australia. “As a result the hurdle to hike again seems high and instead the risks sit to a later start to the easing cycle than our base case” of November.

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Bidenflation Advances: Consumers No Longer Trying to Save for College and Homes, Now Just Spending On Luxuries

by Monica Showalter
American Thinker

Year ago, I read in a book whose title I can’t quite remember, about economists observing something curious in inflation-wracked Argentina: Consumers were no longer saving money. They were spending instead, spending on themselves, buying up luxury goods in conspicuous consumption, and no, it was not a sign of economic health. Saving money made absolutely no sense as the Argentine peso kept losing value. Far sensible to rack up credit card debts and pay with devalued money or else default.

Maybe it was by Paul Blustein, who wrote about the bankrupting of Argentina; his book was called “And the Money Kept Rolling In (and Out).”

But Jason Ma at Fortune magazine has found a respected economist here who is starting to see the same thing:

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How Home Purchases and Rentals Are Key to Bringing Down Inflation: Fed Vice Chair Jefferson Explains

by Wolf Richter
Wolf Street

Fascinating: “Prices that families pay” when they buy homes “can affect their overall well-being.”

The housing sector – rental market and purchase market – is one of the most interest rate-sensitive sectors of the economy and “an important channel of monetary policy transmission,” Fed Vice Chair Philip Jefferson said today at the Mortgage Bankers Association conference. In plaintext, as we’ll see in a moment: The Fed is counting on its higher policy rates to do their thing to the housing market (rental and purchase), with the ultimate goal of lowering demand by households in the broad economy.

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Former Obama Economic Adviser El-Erian: Green Energy Transition Helped Create Higher Inflation Environment

by Ian Hanchett
Breitbart.com

On Friday’s broadcast of Bloomberg’s “Surveillance,” Bloomberg columnist, economist, President of Queens’ College, Allianz Chief Economic Adviser, and former Obama Global Development Council Chair Dr. Mohamed El-Erian stated that the “sustainable energy” transition has helped create “a world that’s subject to higher inflation” than the world we had before.

After arguing that the 2% inflation number is an “arbitrary” number and going from 3% to 2% isn’t worth it, El-Erian said that “if you were to establish an inflation target today based on the secular issues, and let’s talk about it, the domestic paradigm is changing. We’re no longer in this Washington consensus of deregulation, liberalization, and fiscal prudence.

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Multiple Establishment Media Outlets Fact Check Biden’s Repeated False Inflation Claim

by Wendell Husebo
Breitbart.com

At least six establishment media outlets fact checked President Joe Biden’s repeated false claim that inflation was nine percent when he “came into office.”

As initially fact checked in early May by Breitbart News and other media outlets, the Consumer Price Index (CPI) inflation for January 2021, the latest reading when Biden assumed office, was 1.4 percent.

Inflation rose under Biden to historic highs not seen since the early 1980s due in large part to Biden’s massive spending packages, Breitbart News reported:

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Inflation is a Policy. Gold Does Not Reflect Monetary Destruction, Yet.

from Zero Hedge

Authored by Daniel Lacalle,

The money supply is rising again, and persistent inflation is not a surprise. Inflation occurs when the amount of currency increases significantly above private sector demand. For investors, the worst decision in this environment of monetary destruction is to invest in sovereign bonds and keep cash. The government’s destruction of the purchasing power of the currency is a policy, not a coincidence.

Readers ask me why the government would be interested in eroding the purchasing power of the currency they issue. It is remarkably simple.

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Memorial Day Inflation: Travel, BBQ and Booze All Cost More This Year

by Derek Saul
Forbes

Inflation may be more palatable than years past heading into this Memorial Day Weekend, but some of the most essential items for the unofficial kickoff of summer 2024 continue to burn a hole in Americans’ wallets.

Key Facts

– Inflation is sure to be a topic of discussion at Memorial Day barbecues nationwide later this month, with inflation now running at a hard-to-stomach 6% annualized rate over the last three years after coming in at 3.4% in April.

– Though inflation is far better than April 2023’s 4.9% and April 2022’s 8.3%, it’s far above the historical average of about 2%.

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Four Ways Inflation Will Impact Your Summer Travel and Spending

by Madeline Duley
Yahoo! Finance

As the weather warms and the days grow longer, you might be feeling an insatiable urge for travel and adventure. After all, strolling along the beach, hiking to a waterfall or simply enjoying a latte along a bustling street sounds far more appealing than sitting behind your desk from 9 to 5. However, inflation is casting a dark shadow on many Americans’ travel plans, turning dream getaways into anxiety-inducing nightmares.

How Inflation Will Impact Your Summer Travel

With inflation continuing to rear its ugly head, take a look at its impact on Americans’ summer vacation budgets and the strategies you can employ to save money this summer.

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Latest Inflation Figures Are Good News – Even if They Give a Lot of People Heartburn

by Christopher Decker
The Conversation

The U.S. economy is slowing, but not crashing. In the dismal science, this is what counts as good news.

That’s the message I took away from the latest inflation data, released May 15, 2024, which showed U.S. consumer prices rising 3.4% in the 12 months to April 2024. This is down slightly from the 3.5% year-over-year increase reported in March 2024.

In other words, while prices are rising, they’re not going up as sharply as they once were. That’s good news for shoppers; the U.S. economy is far from the 9.1% annual inflation seen in June 2022.

Continue Reading at TheConversation.com…