from Real Vision
Beyond Energy: Inflationary Effects of Metals Price Shocks
by Jorge Miranda-Pinto, Andrea Pescatori, Martin Stuermer, Xueliang Wang
CEPR
The shift from fossil fuels to renewable technologies may render the global economy less oil-intensive and more metals-intensive. This column examines how metals supply shocks propagate through production networks and impact inflation. It finds that copper supply shocks have significant and persistent effects on both headline and core inflation. In comparison, oil supply shocks mostly impact headline inflation immediately. As the global economy becomes more metals-intensive, central banks need to be aware that the effect of metals price shocks on inflation could be less visible initially but more persistent.
Rise in October Consumer Inflation Not Enough to Stop Fed Rate Cuts
by Jason Schenker
Forbes
Consumer inflation accelerated in October 2024. However, the odds of a Federal Reserve interest rate cut on December 18 are still high. October year-on-year total Consumer Price Index inflation accelerated to 2.6% from 2.4%, while total Personal Consumption Expenditures inflation accelerated to 2.3% from 2.1%, and core PCE inflation accelerated to 2.8% from 2.7%. Core CPI was unchanged in October, but it was sticky and more elevated at 3.3%. Despite elevated consumer inflation rates, the chance of a 0.25% Fed rate cut on December 18 was 66% on November 30.
October CPI Consumer Inflation Rates Are Elevated
The U.S. Bureau of Labor Statistics release of the October CPI showed an acceleration in year-on-year total CPI to 2.6% from 2.4%. Although CPI consumer inflation rates have fallen, they are still not at the Fed’s 2% target, and year-on-year total CPI is unlikely to get back down to 2% until sometime in the first half of 2025. Meanwhile, year-on-year core CPI was unchanged and elevated at 3.3% in October.
Capehart: ‘Troubling’ Voters Ignored Mass Deportations, Charges Where They Didn’t Have All the Evidence Due to Inflation
by Ian Hanchett
Breitbart.com
On Friday’s “PBS NewsHour,” Washington Post Associate Editor and MSNBC host Jonathan Capehart stated that “among many things that I found troubling about the 2024 election” was the fact that voters decided “Gas is too high, grocery store prices are too high. And so, yeah, we’re just going to go with” President-Elect Donald Trump, “leave aside all sorts of other things he said, such as mass deportations.” And charges against him where they hadn’t seen all the evidence.
Co-host William Brangham said, “[T]he voters looked at all of that, again, as much as you could, the charges, they don’t see all of the evidence, but they looked at it, and they sized up Donald Trump and said, we pick him.”
Capehart responded, “Right. And that’s what’s among many things that I found troubling about the 2024 election.
Euro Shrugs After Eurozone Inflation Rises
from Market Pulse
The euro is showing little movement on Friday. In the European session, EUR/USD is trading at 1.0564, up 0.09%. There are no US events today and US markets will close early for the Thanksgiving holiday weekend.
Eurozone inflation jumps to 2.3%
Today’s eurozone inflation report was a reminder that inflation may be largely contained but the battle is not yet over. In November, CPI climbed to 2.3% y/y, up from 2% in October and matching the market estimate. Core inflation, which excludes volatile food and energy prices and is a better gauge of inflation trends, was unchanged at 2.7% y/y, shy of the 2.8% market estimate. Services inflation, which has been persistently high, rose 3.9%.
Gold Pares Gains as Inflation Affirms Fed’s Cautious Easing Path
by Yvonne Yue Li
Yahoo! Finance
(Bloomberg) — Gold eked out small gains as the dollar extended losses after the latest US data showed a key inflation gauge picked up last month, reinforcing expectations that the Federal Reserve will adopt a measured approach to lowering interest rates.
The Fed’s preferred measure of underlying inflation — the so-called core personal consumption expenditures price index — increased 2.8% from October last year and 0.3% from a month earlier, according to Bureau of Economic Analysis figures published Wednesday. The price index strips out volatile food and energy items.
The print came after policymakers indicated in the minutes of their November meeting their support for a careful approach to rate cuts. Lower rates typically benefit bullion as it pays no interest.
Trump’s New Tariffs Could Create Higher Gas Prices
And higher gas prices will make it more expensive to move goods around the country.
by Eric Boehm
Reason.com
President-elect Donald Trump’s threat to slap huge new tariffs on all imports from Canada and Mexico will likely cause gas prices to rise in the United States.
That’s because Canada is America’s largest source of petroleum imports, according to the Department of Energy’s data. The U.S. has been importing about 4 million barrels of oil per day from Canada in recent months, thanks to the opening of a new pipeline. Mexico is also a major supplier to the U.S. market, accounting for about 10 percent of all crude oil imports in 2022.
If tariffs make those imports 25 percent more expensive (or if the flow of oil across the border slows or ceases in response to the new trade barriers Trump wants to erect), prices are likely to rise through the rest of the supply chain, including at the pump.
Bidenflation Survey: 44% of Americans Hosting Thanksgiving Concerned About Cost
by Hannah Knudsen
Breitbart.com
Forty-four percent of Americans hosting Thanksgiving are concerned about the cost of the event as they continue to face inflation in the Biden-Harris era, according to Deloitte survey data.
The survey found that, due to rising costs, three of ten hosts are “leaving more friends or relatives off the invite list this year.”
The survey found that 51 percent of hosts making less that $50k are most likely to be concerned about cost, and 41 percent in this bracket said they they will invite fewer guests than they have in the past.
Half making between $50k and $99k said they are concerned about the cost associated with hosting, and 34 percent in that bracket said they will invite fewer guests.
Inflation Re-Accelerates Despite Plunging Gasoline Prices as “Core Services” PCE Price Index Hits Seven-Month High
by Wolf Richter
Wolf Street
Core services inflation is the biggie, and it’s going the wrong way. The Fed is already talking down the pace of rate cuts.
Inflation has been in services and is still in services, it has become sticky in services, and recently it has been re-accelerating in services. Services dominate consumer spending. And durable goods prices rose for the second month in a row, after big drops. But gasoline prices continued to plunge, and food prices ticked up just a little, according to the PCE price index by the Bureau of Economic Analysis today. This is the data the Fed prioritizes as yardstick for its 2% inflation target.
Three of the four major metrics accelerated in October even on a year-over-year basis: the overall PCE price index to +2.3% (blue), the “Core” PCE price index to +2.8%, (red), and the “Core Services” PCE price index to +3.9% (gold), while the durable goods PCE Price index started rising from the ashes and became less negative (green).
‘Black Friday’ Deals Target Inflation-Weary U.S. Consumers
by John Biers
Yahoo! Finance
Inflation has stabilized after dramatic price spikes during the Covid pandemic years, but consumers are still feeling the pinch — meaning bargain-hunting strategies such as grabbing early giveaways and waiting for last-minute steals are in vogue.
Compared with other years, holiday shoppers in 2024 are “even more preoccupied and very focused around value and discounts,” said Vivek Pandya, leading insights analyst at Adobe Digital Insights.
Tech Stocks Spark Europe Market Rebound; Inflation Data Looms
by Reuters
Kitco
Nov 28 (Reuters) – Tech stocks spearheaded a rebound in European shares on Thursday, after a two-day slump fuelled by worries over potential U.S. tariffs and France’s economic and political challenges, with investors now closely watching inflation reports for clues on the future trajectory of interest rate cuts.
The pan-European STOXX 600 (.STOXX), index was up 0.4% to 507.23 points. Trading volumes were expected to be light with the U.S. market shut for Thanksgiving holiday.
The tech sector (.SX8P), climbed nearly 1%, logging its best day in one week, as chip stocks gained after Bloomberg reported the U.S. administration’s China chip curbs could be less severe than expected.