Federal Reserve Officials Signal Cautious Path for Rate Cuts Amid Still-High Inflation
WASHINGTON (AP) — With inflation still elevated, Federal Reserve officials expressed caution at their last meeting about cutting interest rates too quickly, adding to uncertainty about their next moves.
by Christopher Rugaber
Times-Colonist
WASHINGTON (AP) — With inflation still elevated, Federal Reserve officials expressed caution at their last meeting about cutting interest rates too quickly, adding to uncertainty about their next moves.
Even if inflation continued declining to the Fed’s 2% target, officials said, “it would likely be appropriate to move gradually” in lowering rates, according to minutes of the November 6-7 meeting.
The minutes don’t specifically provide much guidance about what the Fed will do at its next meeting Dec. 17-18. Wall Street investors see the odds of another quarter-point reduction in the Fed’s key rate at that meeting as nearly even, according to CME Fedwatch. Most economists think officials will probably cut rates next month for the third time this year, but could then skip cutting at following meetings.
Thanksgiving Inflation: Cost of Holiday Feast Up 24% Under Joe Biden
by John Carney
Breitbart.com
Thanksgiving dinner will cost a staggering 24 percent more this year than it did before Joe Biden took office.
A dinner for 10, featuring 12 traditional dishes—like turkey, stuffing, cranberries, and pumpkin pie mix—will average $58.05, according to an annual survey by the American Farm Bureau Federation. That’s up from $46.90 at the last Thanksgiving of Donald Trump’s first term.
The price of a 16-pound turkey is $25.67 on average this year, up 32 percent from the pre-Bidenflation Thanksgiving of 2020.
“While consumers are getting some much-needed relief after years of elevated retail prices, these grocery bills also reflect some hard conversations around the dinner table for farm and ranch families,” the American Farm Bureau said.
The Pandemic Election
Sure, blame Biden for inflation—but every economic path out of the COVID-19 crash has been deeply unpopular.
by Zachary D. Carter
Slate.com
By now we are all familiar with the refrain that inflation cost Democrats the election. Critical accounts blame Joe Biden for driving prices higher with federal spending, while sympathetic treatments note a worldwide trend of inflation toppling governments around the world.
Neither assessment is quite right. Voters did indeed reject Kamala Harris over frustration with the Biden economy, but voters across the world are throwing out incumbents due to outrage over a very broad array of economic conditions. In Japan, inflation barely raised its head after the pandemic, and yet the reigning conservative government just took its biggest electoral hit in decades as its economy slips in and out of recession. The German economy hasn’t grown since the pandemic, and voters appear ready to oust the ruling center-left coalition as soon as they can. The U.K. is on its fourth prime minister since the pandemic and seems eager for a fifth.
Do Voters Focus On Prices or Inflation?
by Scott Sumner
Econlib
In my previous post, I expressed concern that the Fed may be planning to move policy even further away from a “level targeting” approach. One criticism of symmetrical level targeting is that it might be politically unpopular to bring prices down at a time when inflation has overshot the central bank’s target path. A recent article in the Financial Times suggests that the exact opposite may be true:
Many big central banks have implicitly returned to setting monetary policy with reference to Taylor Rule models, where interest rates are anchored around how far the economy is from the inflation target, and the degree of slack in the economy. However, these elections suggest that voters would prefer more price-level stability, over low inflation rates, or full employment.
If that’s the case, then central banks might want to revisit an alternative policy framework; the idea of price-level targeting, as proposed by Professor Michael Woodford of Columbia University. In this framework, policy targets a constant rise in the level of prices over time, so that if prices rise above that rate, policy has to respond sufficiently to reverse any price level divergence. This contrasts with the current framework, which can celebrate a return to 2 per cent inflation, even though the target has been missed for multiple years, and has left households with major losses in real purchasing power. By encouraging early action to limit the initial divergence from the desired price levels, this framework can, theoretically, deliver gains for consumers.
We need to be careful in interpreting election results. If we did see a return to high unemployment, then voters might start caring more about unemployment than high prices. But I don’t see a tradeoff here. A policy of NGDP level targeting, or even a true “flexible average inflation targeting” policy (not the policy adopted by the Fed) would deliver both more stable prices and more stable employment in the long run. In the end, it is economic success that is politically popular.
Fed’s Key Inflation Measure Likely Stayed Above-Target in October
Inflation as measured by Personal Consumption Expenditures likely reaccelerated in October, according to forecasts of the report due Wednesday.
by Diccon Hyatt
Investopedia
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The Federal Reserve’s preferred measure of inflation likely stayed too hot for comfort in October, though possibly not hot enough to derail the central bank’s expected move to cut interest rates again in December, according to forecasts.
Forecasters expect a Bureau of Economic Analysis report Wednesday to show the cost of living as measured by Personal Consumption Expenditures rose 2.3% in October over 12 months, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. That would be up from a 2.1% annual increase in September.
If forecasts prove accurate, the uptick would mirror a separate inflation measure, the Consumer Price Index, which also showed inflation rising in October on a year-over-year basis.
Survey: Most Say Ending Inflation and Price Increases the ‘Greatest Hope’ for Trump Administration
by Hannah Knudsen
Breitbart.com
Ending inflation and price increases is the “greatest hope” people have for the incoming Trump administration, according to the latest survey by the Harris Poll and HarrisX.
The survey asked respondents, “What are your greatest hopes for the newly elected Trump administration?”
WATCH — More Inflation Coming? Mitch Doesn’t Rule Out Omnibus Spending Bill at the End of the Year:
[…] One issue emerged above all others: Most, 68 percent, identified ending inflation and price increases as their greatest hope for President-elect Trump and his incoming administration. There is bipartisan consensus on that as well, as 81 percent of Republicans, 68 percent of independents, and 57 percent of Democrats also identify it as a top hope for the incoming administration.
Joe Biden Added $1 Trillion to the National Debt in Just 118 Days
by James Hickman
Schiff Sovereign
Andrew Jackson was never supposed to be President.
When he entered the presidential race in 1828, most of the ‘experts’ viewed him as a joke candidate with no chance of victory. Party insiders assumed that, at most, Jackson might steal a few votes from opposition candidates… but that he was no real threat.
Instead, Andrew Jackson caught fire. He was the ultimate outsider with very little experience in Washington (he had briefly served as US Senator from Tennessee for just six months), and he spoke bluntly about the problems affecting everyday Americans.
And when he unexpectedly won the election and became the country’s 7th President, Jackson’s first order of business was to clean house. He announced in his inaugural address that he would remove incompetent bureaucrats from office, and he immediately launched an investigation into all departments to root out corruption.
Trump’s Treasury Pick is Scott Bessent. He’s Said It’s Absurd to Fear ‘Trump-Flation.’
Hedge-fund manager Bessent was among a flurry of cabinet selections announced by Trump late Friday
by Victor Reklaitis and Robert Schroeder
Market Watch
Bessent, who for months has been viewed as a likely choice for the Treasury post, has called for a second Trump presidency to focus on deregulation, increased energy production and a lower federal deficit. He also has defended the president-elect’s economic policies from the charge that they would boost inflation, telling MarketWatch in July that it was “absurd” to think they’d be inflationary.
Three Unusual Inflation Hedges
by Adam Sharp
Daily Reckoning
As we float in the trough following the first wave of inflation, bracing for the next, it seems an excellent time to review a few alternative inflation hedges.
Today we’ll examine the benefits of owning firearms, farmland, and fixed-rate mortgages during inflationary periods. Let’s get started.
Inflation Hedge No. 1: Firearms
I’ve honed my “firearms as a hedge” pitch to perfection. I’ve found that it works fairly well on skeptical wives when one needs to justify certain purchases.
But it’s also real. High-quality firearms tend to hold their value remarkably over time. As long as they are properly stored and maintained, firearms tend to keep pace with inflation.
Egg Shortage and Price Increase Hit U.S. Amid Holiday Season
by Amy Furr
Breitbart.com
Americans may find it hard to get eggs this holiday season because of bird flu outbreaks and the economy.
There has been a shortage of eggs in some stores across the nation, CBS News reported on Friday, noting the businesses in states that require eggs from cage-free hens have been affected by Highly Pathogenic Avian Influenza (HPAI).
“More than 40% of the nation’s roughly 300 million egg-laying hens are raised in cage-free facilities, but roughly 60% of ‘bird flu’ cases recently detected involved cage-free farms,” the report continued. There have been outbreaks recently in Utah, Oregon, California, and Washington, per Emily Metz, who is the chief executive and president of the American Egg Board.
She added that the reports of shortages are coming from grocery stores such as Whole Foods and Trader Joe’s. Meanwhile, shortages related to the virus have caused egg prices to rise, and experts predict the cost may remain high into 2025.