from Three Star Vagabond
Mortgage Rates Explode, 2-Year & 10-Year Treasury Yields Spike, Monster Rate-Cut Hopes Doused, Inflation Fears Resurface: Yield Curve Before & After the Rate Cut
by Wolf Richter
Wolf Street
The yield curve moved further toward un-inversion, but not the way it was hoped.
The Treasury yield curve un-inverted by another big step on Friday: The three-month yield has vacillated in the same range for the past 11 trading days following the drop after the monster rate cut. But longer yields surged, starting with the one-year yield, with rate cut expectations getting slashed, and with inflation fears returning. This nearly fixed position at the short end and surge in yields further out on the yield curve caused it to un-invert by another step, but not the way folks had hoped.
Labor Secretary to Voters Backing Trump Over Affordability: Must ‘Live in a World of Facts’, Inflation’s Down, There’s Gouging
by Ian Hanchett
Breitbart.com
On Friday’s “CNN News Central,” acting Labor Secretary Julie Su responded to people who say that they’re supporting 2024 Republican presidential candidate former President Donald Trump because they don’t trust his Democratic opponent, Vice President Kamala Harris on the economy due to affordability issues by stating that “we have to live in a world of facts. By just about every single measure, what we are seeing with the economic recovery we have had since what we inherited from the last administration is a success story.” And that while prices are an issue, “The inflation rate is down to its pre-pandemic levels. And we have called on companies who’ve made record profits to make sure that they’re not taking advantage of the situation to say, oh, somehow, inflation was like a force of nature.”
Get Ready for the Return of Punishing Inflation
The US government has racked up $12 trillion in debt over the past four years. What will you do when it’s racking up $12 trillion every four months? Because that’s where we’re headed. Meanwhile, global financial conditions are as easy as they’ve ever been. What’s the emergency you ask? Good question…
by Dr. Chris Martenson
Chris Martenson’s Peak Prosperity
I’ve got to keep this write-up short this week. Paul starts with an incredible tale from a construction crew that took it upon itself to drive into the heart of the Helene damage to see if they could help.
They ended up pulling a family of six out of a ruined mud-filled house who had been trapped for 48 hours.
The fact that the government spends all of our money propping up ““markets”” and sending our tax dollars by the tens of billions overseas to kill people in the Middle East is becoming unavoidably obvious to more and more people.
Specifically, global liquidity has only been easier three other time in history and global money growth is up over $7.3 trillion over the past year.
Inflation is Coming Down, but Prices Won’t
[Ed. Note: Fun fact for very low IQ people…. Less inflation is NOT the same as deflation.]
by Kristin Schwab
Market Place
Matt Kliegman had been avoiding raising prices at Black Seed Bagels in New York City for years.
“You kind of hold on as long as you can,” said Kliegman, who finally raised prices 50 cents to $1 over the last few years as inflation surged. “And that came for many of us in this kind of period after COVID.”
Now, the economy is in a different place. The Federal Reserve’s interest rate cut signaled a turning point in this multi-year battle with inflation, and inflation continues to fall. That’s good news for consumers, but it’s also created some confusion as to why prices aren’t coming down along with interest rates.
To explain, let’s break down what goes into the cost of a bagel at Black Seed Bagels, which sells for around $2:
Private-Label Food Got More Popular Thanks to Inflation – But Now It’s Here to Stay
by Rosa Saba
BNN Bloomberg
Over the past few years, consumers have been buying more private-label products at the grocery store to save money — and the trend may be here to stay.
Amid renewed investment by grocers in their store-branded offerings, studies show many shoppers no longer see store brands as lower quality than name brands.
“For customers, the private brand is becoming not just a knockoff,” said Annie St-Laurent, senior director for Metro’s private-label portfolio.
“The growth is really good in private label.”
Grocers’ in-house brands — like Metro’s Irresistible and Selection, Loblaw’s No Name and President’s Choice, and Sobeys’ Compliments and Panache — tend to be priced lower than their name-brand competitors.
Struggling Fast-Food Chain Shutting Down Dozens of Restaurants
The popular restaurant chain closed a net total of 85 locations in its 2024 fiscal year.
by Kirk O’Neil
The Street
Restaurant chains have faced financial distress this year related to several factors, such as rising food prices caused by inflation, increased interest rates, and changes in consumer spending habits.
The harsh economic impact on restaurants has led several to close locations and sometimes file for bankruptcy.
[…] Struggling Pizza Hut operator EYM Pizza, which operates franchise locations in Illinois, Indiana, Ohio, Texas, and Wisconsin, filed its Chapter 11 petition in the U.S. Bankruptcy Court for the Eastern District of Texas on July 22 and hired brokerage National Franchise Sales to sell its 127 restaurants through its bankruptcy case.
The Irving, Texas-based pizza franchisee had been sued by Yum Brands’ (YUM) Pizza Hut after it stopped paying royalties when a forbearance period with its parent company ended.
Services Sector Expansion Accelerates to Fastest Pace Since 2023
by John Carney
Breitbart.com
The U.S. services sector expanded in September at the fastest pace in nearly two years, driven by a flurry of orders and stronger business activity.
The Institute for Supply Management’s index of services rose 3.4 points to 54.9 last month, data released Thursday showed. Readings above 50 indicate expansion.
The reading exceeded even the most bullish estimates from Wall Street economists.
The measure of orders rose 6.4 points, the most since the start of 2023. The output gauge rose 6.6 points to 59.9 but the employment metric slipped, the first contraction in three months.
The prices-paid index climbed 2.1 points to 59.4, indicating rising inflationary pressures.
Inflation Cooled Further in August: OECD
Declining energy prices drive rates down, core inflation easing too
by James Langton
Investment Executive
With energy prices easing, headline inflation dropped in August, the Organization for Economic Cooperation and Development (OECD) said in a report on Thursday.
The annual inflation rate for the OECD fell from 5.4% in July to 4.7% in August, with price pressures declining in 24 of the 38 countries, the Paris-based group reported.
The decline in headline inflation came as the energy inflation rate dropped sharply from 3.3% in July to -0.1% in August. Core inflation (excluding food and energy prices) was also down, the OECD said.
For the G7, headline inflation fell in every market except Japan. For the group, inflation dropped to 2.4% overall, down from 2.7% in July.
Declining energy prices also led the easing in the G7’s headline inflation.
What McNuggets Tell the Fed About Inflation
The popularity of value meals at fast food restaurants points to a major reason that inflation has fallen in recent months.
by Diccon Hyatt
Investopedia
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If you want to understand why prices for many things aren’t rising as fast as they were a couple years ago, a good place to start would be the drive-thru.
That’s according to one of the officials at the Federal Reserve who sets the nation’s monetary policy to keep inflation under control. In a speech Wednesday, Tom Barkin, president of the Federal Reserve Bank of Richmond, said the habits of McDonald’s customers showed why inflation continues to fall.
“Consumers are driving this drop,” Barkin said in remarks at an economic conference in Wilmington, North Carolina. “Frustrated by high prices, they have become increasingly price conscious.”
Global Supply Chains Are Under Pressure Again. Will Inflation Start Rising?
Conflict in the Middle East, a strike at US ports, problems at the Panama Canal … a rush of problems could create a crisis for exporters
by Jack Simpson, Phillip Inman and Jillian Ambrose
The Guardian
With a pandemic that upended global trade through lockdowns and travel restrictions still fresh in managers’ minds, international supply chains are again under pressure.
Shippers are facing myriad issues, from the conflict in the Middle East and drought in Central America to strike action in the US, and companies are finding it more difficult – and more expensive – to transport supplies.
So, how bad is the supply chain squeeze?
Why are supply chains under pressure?
Global shippers have been faced with a growing number of headaches in moving goods over the last year.