from Reuters
Key Fed Inflation Gauge Shows PCE ‘Going Sideways’
by Josh Schafer
Yahoo! Finance
The latest reading of the Federal Reserve’s preferred inflation gauge showed price increases were flat in October from the prior month, raising questions over whether progress in getting to the central bank’s 2% goal has stalled.
The core Personal Consumption Expenditures (PCE) index, which strips out food and energy costs and is closely watched by the central bank, rose 0.3% from the prior month during October, in line with Wall Street’s expectations for 0.3% and the reading from September.
Over the prior year, core prices rose 2.8%, in line with Wall Street’s expectations and above the 2.7% seen in September. On a yearly basis, overall PCE increased 2.3%, a pickup from the 2.1% seen in September.
Thanksgiving Dinner Offers a Glimpse Into How We’re Doing On Inflation
by Janna Herron
Yahoo! Finance
Count your blessings: Thanksgiving dinner is cheaper again this season.
That marks the second year in a row the price of the meal retreated from its 2022 high. The average cost is $58.08 for 10 people, according to the American Farm Bureau Federation’s (AFBF) study, which dates back 39 years. The total price is down 5% from last year and is 4.5% lower than in 2022, when the supper commemorating the 1621 harvest feast with the Pilgrims and the Wampanoag people soared to a peak of $64.02.
The survey’s cornucopia of goods includes turkey, stuffing, sweet potatoes, rolls, peas, cranberries, a veggie tray, and pumpkin pie with whipped cream. AFBF’s expanded menu — which also consists of boneless ham, russet potatoes, and frozen green beans — increases the overall cost by $19.26.
GoldSeek Radio Nugget – David Haggith: Inflation and Uncertainty Weigh On Gold
by Chris Waltzek
GoldSeek
David Haggith, head of The Daily Doom, rejoins the show with gold roaring back to near bull market highs this week. In this weekly wrap-up, David reviews the charts with key insights on the economic data.
– David reviews the inflation data.
I’m not really sure what to attribute that much movement to, in terms of the exact trigger. There’s an awful lot going on now with the bond market, with inflation bouncing around, and with wars. My focus, like you say, has been more on the inflation side with the PCE, where I’ve been saying, I was saying last year that we were going to see a rise in inflation. This year, we got it immediately when the year started for the first three months, and even the Fed had to acknowledge it.
And then, when it kind of tapered back off and everybody was saying, ‘Okay, we’re done with it,’ I said, ‘No, we’re not.’ And it’s going to come back again and now, we are towards the end of summer—and here we are, end of summer—it’s coming back again. If you look at the PCE and you look particularly, or look also at producer inflation as well, we saw that, no, it’s not over, it’s coming back…and it keeps coming back stronger and stronger each of the last couple of months and I think that’s what I expected to see.
Return of the ‘Tariff Man’
Plus: Are tariffs inflationary, RIP to a giant of the free market movement, and more…
by Eric Boehm
Reason.com
Okay, so we’re doing this. President-elect Donald Trump says in no uncertain terms that he’ll seek to raise taxes on imports immediately after taking the oath of office.
“On January 20, as one of my many first executive orders, I will sign all necessary documents to charge Mexico and Canada a 25% tariff on ALL products coming into the United States,” Trump posted Monday night on Truth Social.
In the statement, Trump said the tariffs would be issued in response to “thousands of people…pouring through” the border from America’s two neighbors, and that the tariffs would remain in effect until Mexico and Canada take steps to stop the flow of drugs and migrants. “Until such time as they do, it’s time for them to pay a very big price,” Trump concluded.
Does a HELOC Make Sense with Inflation Rising Again? What Experts Say.
by Christy Bieber
CBS News
Borrowing against the equity in your home has long been an affordable way to access funds. However, home equity loans and home equity lines of credit (HELOCs) became more expensive over the past several years as inflation surged in the post-pandemic era.
As inflation began to cool in 2024, those hoping to get a loan against their equity saw signs of potential relief in the interest rate forecast. Unfortunately, this was short-lived as inflation began to tick back up and home equity and HELOC loan rates once again began to climb.
With inflation rising slightly in October, many homeowners are left wondering if a HELOC makes sense during these turbulent economic times — especially since, unlike a home equity loan, HELOCs have variable interest rates.
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.