Things Are Tough All Over, Plus U.S. Dollar Troubles
from King World News
As we continue to kickoff 2025, things are tough all over, plus a look at US dollar troubles.
US Dollar Troubles
March 3 (King World News) – Peter Boockvar: Keep an eye on the US dollar index as chart wise it’s looking like the right shoulder of a classic head and shoulders top.
[…] The data focus today is on February global manufacturing with a slew of PMI’s being released ahead of the US ISM at 10am est. I’d call it all a very mixed bag.
Europe’s Inflation Rate Fell to 2.4% in February
by Baystreet Staff
Bay Street
Europe’s inflation rate declined to an annualized rate of 2.4% in February but came in slightly above the expectations of economists.
According to data from statistics agency Eurostat, core inflation, which takes out energy, food, alcohol and tobacco costs, declined to 2.6% in February from 2.7% the previous month.
Services inflation, which has proven sticky in recent months, also decreased, coming in at 3.7% on a year-over-year basis, down from 3.9% in January.
The main reason for the February decline in inflation was energy prices, which rose only 0.2% during the month compared to a 1.9% increase in January.
ECB Set to Cut Interest Rates Again as Inflation Takes a Back Seat to Trump
But is it enough for the central bank just to take its foot off the brake?
by Geoffrey Smith
Politico
The European Central Bank is set to cut interest rates again next week, determined to do its bit to support an economy beset by a host of problems largely outside its control.
For four years, the ECB has been trying to slow the economy down, raising its key deposit rate to a record 4 percent to choke off inflation, before gradually lifting its foot off the brake since June. Next week’s expected rate cut will be the sixth in the current sequence, and will bring the deposit rate down to 2.5 percent.
But it’s what comes after the Governing Council’s decision on Thursday that is the interesting bit. ECB President Christine Lagarde will be under pressure to communicate clearly where rates will go for the rest of the year, at a time when the changeable rhetoric and actions of U.S. President Donald Trump make clarity effectively impossible.
No Winners When the Inflation Balloon Pops
by Kelsey Williams
GoldSeek
As the economy slowly grinds to a standstill, the expectations of worsening inflation continue to rise. “Stagflation”, you say? Possibly; but, there is another risk that is greater than stagflation. And, the prospects are much gloomier than those envisioned by a scenario which features an ordinary recession accompanied by marginally higher prices.
THE EFFECTS OF INFLATION
Inflation is the debasement of money by government. As governments (via their central banks) create money by expanding the supply of money and credit, it cheapens the value of all the money in circulation and causes a loss of purchasing power in the currency (dollar, euro, etc.). The loss of purchasing power results in higher prices for goods and services.
PCE Inflation Hits 4.0% Month-to-Month Annualized, Worst Since March. Three-Month PCE Hits 2.9%, Worst Since April, but Massive “Base Effect” in Services Cools YoY Increases.
by Wolf Richter
Wolf Street
December, prior months revised higher. Goods prices jump month-to-month by most since August 2023, turn positive for first time in a year.
The inflation measure released today – the PCE price index favored by the Fed as yardstick for its inflation target – jumped by 0.33% in January from December, or by 4.0% annualized, the worst month-to-month increase since March 2024. And this was on top of the upwardly revised December increase.
So, the 3-month PCE price index accelerated to +2.94% annualized, the worst increase since April 2024. The low point of the three-month index was in July (+1.6% annualized), and it has been accelerating ever since. The chart shows the month-to-month changes (blue) and the three-month changes (red), all annualized.
Treasury Secretary Says Administration is ‘Working Every Day’ On Affordability Crisis After ‘Years of Disastrous Policies’
by Fiona McLoughlin
DailyCaller.com
Treasury Secretary Scott Bessent said during a Sunday interview with CBS News that the Trump administration is “working every day” on the affordability crisis in the U.S.
Margaret Brennan, the host of “Face the Nation,” spoke with Bessent, discussing a poll showing that at least half of Americans report “concern about paying for food and groceries and housing.”
“And I will tell you, President Trump was elected, one of the reasons was the affordability crisis, and we are setting about doing that,” Bessent began.
“I can tell you, we’re working every day. What I will point out, interest rates, the 10-year bond, which I am focused on, have been down every week since President Trump was president. Mortgage rates have been down every week. So that’s a pretty good start,” he continued.
Democrat Senator Blunt Rochester: Democrats Are Fighting to Ensure Egg Prices Aren’t Rising
by Ian Hanchett
Breitbart.com
During an interview aired on Thursday’s “PBS NewsHour,” Sen. Lisa Blunt Rochester (D-DE) said that she wants people to recognize that Democrats are “all in this fighting to make sure that the cost of eggs [is] not skyrocketing, even though this president said, on day one, he was going to address the economy.”
Blunt Rochester said, “[A] lot of times, people say, if you want to see their priorities, look at their checkbook. They’re showing us exactly what their priorities are. When you’ve got 72 million people in this country who are on Medicaid in some way, it might be a parent who has a child with a disability, it might be a family whose grandparent is in a nursing home, people are going to be touched and hurt if these things move forward.”
Senate Democrats Big Talk About Fighting Inflation Turns Out to Be Just That
by Adam Pack
DailyCaller.com
Senate Democrats have been insistent about the problem of inflation with President Donald Trump in the White House, but they have also resisted efforts by Republicans to lower prices.
Senate Republicans undertook several efforts this week to reverse Biden administration regulations on restricting fossil fuels that have notably contributed to soaring energy and electricity prices. But Democrats who claim to be concerned about persistent inflation have largely resisted their Republican colleagues’ efforts to rescind Biden regulations aimed at lowering prices for everyday Americans.
How FDR’s Attack on the Gold Standard Spawned an Age of Inflation
by Thomas DiLorenzo
LewRockwell.com
In his great classic, Crisis and Leviathan, Robert Higgs explained how Franklin Roosevelt’s attacks on the gold standard ushered in “the age of inflation” that has now robbed generations of Americans through the inflation tax. The explanation begins with the goofy economic theory that was the basis for the first New Deal: The backwards belief that low prices caused the Great Depression; therefore, if government could force prices up by restricting production the Depression would end. Think about that: The government’s policy was to reduce production, which of course would increase unemployment to supposedly end the extreme unemployment of the Great Depression! The reality was that the Depression caused the lower prices, not the other way around. FDR’s “brain trust” got it all backwards.
Pritzker: ‘Prices at the Grocery Store Are Going Up Because Democracy is Being Taken Away’
by Ian Hanchett
Breitbart.com
On Wednesday’s broadcast of MSNBC’s “Deadline: White House,” Illinois Gov. JB Pritzker (D) argued that “the prices at the grocery store are going up because democracy is being taken away.” And “The impact on you in terms of your health care, 770,000 people in Illinois will lose health care as a result of what Donald Trump and Elon Musk and the Republican Congress are doing right now, it’s a danger to your way of life, and that’s what people need to understand.”
Pritzker said, “When you lose, as is happening in my state –we’re losing our meat and poultry inspectors. Remember, if you are in the meat and poultry industry, you’re trying to sell your goods, you can’t sell them if nobody’s inspecting them. And, by the way, when you go to the grocery store and your prices go up because the supply chain is broken or when there’s contaminated meat or poultry on the shelves because we don’t have any more inspectors, those are the rights, those are the things that people expect to see and they’re not seeing them.”