from Yahoo Finance
Can the Fed Control Interest Rates?
by Ron Ross
American Thinker
The Federal Reserve Board (the “Fed”) seldom does anything newsworthy, but recently it did just that.
It lowered its “target range” for something known as “the federal funds rate” by one half of one percent to 4.75-5.00 percent, its first cut in the target range in four years. Should you be happy or sad?
The answer is, neither. It would be hard to imagine anything more irrelevant or disconnected from the rest of the economy than changes in the federal funds target range.
There are countless economic myths but perhaps the most puzzling of them all is that the Federal Reserve Board has the power to control interest rate levels. That may also be the most widely believed economic myth.
What to Expect From September’s CPI Inflation Report
by Simon Moore
Forbes
Consumer Price Index inflation data to be released on October 10 is expected to provide some support for the Federal Open Market Committee cutting rates in November. However, unemployment data may ultimately matter more for the FOMC’s decision making.
Recent Inflation Data
All inflation metrics are down over the past 12 months according to the Atlanta Fed’s Dashboard that measures a range of inflation metrics. Specifically, headline annual CPI inflation is 2.5% to August 2024 and core CPI, which removes swings in food and energy prices is 3.2%.
More Evidence This May Be the End of the Historic Plunge of Used Vehicle Prices That Had Pushed Down CPI
by Wolf Richter
Wolf Street
Amid tight supply and strong demand.
Prices of used vehicle sold at auctions across the US barely dipped in September after having jumped for two months in a row.
Not seasonally adjusted, wholesale prices inched down by $26 on average per vehicle, or by 0.1%, in September from August, to $18,693, after having jumped by $513 in the prior two months combined, according to the Manheim Used Vehicle Value Index, which is adjusted for changes in mix and mileage (blue in the chart below).
Canada’s NewSpeak: Government Says Inflation is Caused By Climate Change
by Mark Jeftovic
The Daily Bell
Government wants to rename “inflation” to “heat-flation” so they can blame rising prices on climate change.
The Trudeau government cabinet wanted to rename “inflation” to be called “heat-flation” in order “to persuade Canadians to associate the rising cost of living with climate change”.
According to Blacklocks Reporter, The Privy Council Office convened a focus group in April (taxpayer funded, obviously) in order to test out the labels ‘climate-flation’ and ‘heat-flation’.
Nobody in the focus group had ever heard those terms,
Inflation Update and the Start of Q3 Earnings: What to Know This Week
by Josh Schafer
Yahoo! Finance
A turbulent five days for markets, featuring rising tensions in the Middle East and a port strike that both started and stopped, was capped off by a better-than-expected September jobs report that helped stocks close marginally up on the week.
For the first week of October the S&P 500 (^GSPC) rose 0.2%, while the Nasdaq Composite (^IXIC) and Dow Jones Industrial Average (^DJI) rose about 0.1%.
An update on inflation and the start of third quarter earnings reports will grab investor attention in the week ahead.
Delta, Wells Fargo, Pepsi, Inflation Data, Fed Minutes, and More to Watch This Week
by Nicholas Jasinski
Barron’s
PepsiCo will publish results on Tuesday, followed by Delta Air Lines and Domino’s Pizza on Thursday. Then, on Friday, JPMorgan Chase, Wells Fargo, Bank of New York Mellon, BlackRock, and Fastenal will all report.
On Thursday morning, the Bureau of Labor Statistics will release the consumer price index for September. Economists’ consensus calls for a 2.3% increase from a year earlier, a slowdown of two-tenths of a percentage point from August. The BLS will release the producer price index on Friday morning.
On Wednesday afternoon, economists and Federal Reserve watchers will pay close attention to the minutes from the central bank’s September policy meeting. Close observers will focus on details of the debate over whether to lower interest rates by a quarter or a half of a percentage point.
U.S. Inflation is Set to Reassure a Labor Market-Focused Fed
by Vince Golle and Craig Stirling
BNN Bloomberg
(Bloomberg) — US inflation probably moderated at the end of the third quarter, reassuring a Federal Reserve that’s shifting more of its policy focus toward shielding the labor market.
The consumer price index is seen rising 0.1% in September, its smallest gain in three months. Compared with a year earlier, the CPI probably rose 2.3%, the sixth-straight slowdown and the tamest since early 2021. The Bureau of Labor Statistics will issue its CPI report on Thursday.
The gauge excluding the volatile food and energy categories, which provides a better view of underlying inflation, is projected to rise 0.2% from a month earlier and 3.2% from September 2023.
War, Inflation and the Neutral Rate
from Zero Hedge
By Peter Tchir of Academy Securities
War, Inflation and the Neutral Rate
The probability that we see oil production targeted as part of the escalating fighting in the Middle East has increased. Academy’s General (ret.) Robeson, Rachel Washburn and Peter Tchir discuss this in a highly viewed webinar – Risk of Further Escalation in the Middle East. The webinar was very much driven by audience Q&A, which reflect the uncertainty managers are facing when dealing with the conflict. We highlight oil as disruptions in oil supply or production would have the largest impact on the global economy.
Academy also published a number of SITREPs which can be found here. (you may need t contact your Academy representative for access to all the reports). The most recent SITREP covers the Iranian Missile Attack. We also examine that incident and our outlook from a T-Report perspective in Fool Me Once, Shame on You, Fool me Twice, Shame on Me.
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.”