from Valuetainment
ECB Rate Cuts: ‘We’re Breaking the Neck of Inflation,’ Says Lagarde
by Piero Cingari
EuroNews
Inflation is on track to hit the medium-term 2% target in 2025. The ECB remains data-dependent, with no pre-commitment to future rate changes.
In a press conference following the European Central Bank’s (ECB) decision to cut interest rates by 25 basis points, President Christine Lagarde hailed the central bank’s progress in tackling inflation, declaring figuratively: “We’re breaking the neck of inflation.”
The deposit facility rate, the rate at which the ECB steers monetary policy, has now fallen to 3.25%, marking the lowest level since May 2023.
Why the ECB decided to cut interest rates
Lagarde highlighted several key factors that drove the ECB’s decision to cut rates in October.
Treasury Secretary Janet Yellen Warns “Sweeping, Untargeted Tariffs” Would Reaccelerate Inflation
by Aimee Picchi
CBS News
Treasury Secretary Janet Yellen will warn in a Thursday speech that the type of tariffs planned by former President Donald Trump, if he were to retake the White House, would reignite inflation and harm the economy.
The remarks from Yellen, which she will deliver when she speaks at 3 p.m. ET today at the Council on Foreign Relations in New York, will take aim at the potential economic impact of Trump’s proposals for 10% across-the-board levies on all products imported into the U.S. from overseas, as well as tariffs of 60% or more on imports from China.
While Yellen didn’t specifically name Trump, she described the dangers of “sweeping, untargeted tariffs” in excerpts of the speech released early Thursday by the Treasury Department.
ECB Cuts Rates as Expected with Disinflation “Well On Track”. Keeps Guidance Unchanged
from Zero Hedge
As expected by literally every economist, moments ago the ECB cut its three key rates by 25bps for the second consecutive meeting, in a show of support to the rapidly shrinking European economy and saying it did so because “incoming information on inflation shows that the disinflationary process is well on track” and adding that “the inflation outlook is also affected by recent downside surprises in indicators of economic activity. Meanwhile, financing conditions remain restrictive.”
Specifically, the ECB cut its Marginal Lending Facility from 3.90% to 3.65%, the Refinancing rate from 3.65% to 3.40% and the Deposit Rate from 3.50% to 3.25%.
Trump Tariffs, Deportations Could ‘Reignite’ U.S. Inflation, Economic Studies Say
[Ed. Note: What a headline… The CBC is Canada’s government-owned-&-operated news source… Let this stupidity really sink in for a minute… DEPORTATIONS cause inflation… Ok, that makes total sense. We have some real ‘Milton Friedman level geniuses’ working at the CBC. These are the same geniuses who told Canadians that food prices were going up due to climate change… It’s easier than admitting your reckless fiscal policy is to blame.]
from CBC News
Food, Rent, Electricity Prices Soar Under Joe Biden and Kamala Harris
by Amy Furr
Breitbart.com
Americans have been feeling the pain of rising costs of everyday necessities since President Joe Biden (D) and Vice President Kamala Harris (D) took office in January 2021.
Prices for food, rent, and electricity have trended upward under the Biden and Harris administration, according to data from the Federal Reserve Bank of St. Louis.
The price of groceries is up 22.6 percent, rent is up 23.2 percent, and electricity is up 28.3 percent.
It is important not note that Harris is campaigning with her running mate, radical leftist Gov. Tim Walz (D-MN), against former President Donald Trump (R) and his running mate, Sen. JD Vance (R-OH), for the White House in 2024.
Global Inflationary Episode Offers Lessons for Monetary Policy
The inflation surge followed a unique disruption to the global economy, but it still offers important lessons for central banks
by Jorge Alvarez, Alberto Musso, Jean-Marc Natal, Sebastian Wende
IMF
Pandemic lockdowns initially tilted demand away from services and toward goods. But this came at a time when unprecedented fiscal and monetary stimulus boosted demand, and many firms were not able to ramp up production fast enough, resulting in mismatches between supply and demand and rising prices in some sectors.
For example, ports were stretched to or beyond their capacity, partly due to pandemic-related staffing shortages, so as demand for goods surged, this resulted in backorders. When economies reopened, demand for services came roaring back and Russia’s invasion of Ukraine sent commodity prices soaring, in turn pushing global inflation to its highest level since the 1970s.
Is the Inflation Monster Still Hiding Under the Bed?
by Mike Maharrey
Money Metals Exchange
The so-called grownups tell us everything is fine. The inflation monster is gone now.
Or is it?
Sure, most people don’t believe it’s there, but I think the inflation monster is hiding under the bed. The adults in the room say it’s not there. But kiddos, there are signs — if you look close enough.
The headline number in last week’s September Consumer Price Index (CPI) report provides a false sense of security. Annual price inflation dropped to 2.4 percent, the lowest since February 2021.
Sounds as if we’re perfectly safe lying in our bed, right?
But look and listen a little more closely.
U.S. Drinking Rates Hit Highest Level Since 1970s Inflation Storm as Tequila Demand Soars
from Zero Hedge
A broad overview of America’s beer, spirits, and wine consumption reveals a steady increase since the Dot Com bust, with per capita levels approaching the highs last seen during the inflation-driven misery storm of the 1970s. Economic misery and rising alcohol consumption often go hand in hand.
“During periods of recession, US per capita alcohol consumption from beer, spirits and wine has been very resilient. Total beer volume declined in 2009 whilst spirits volume continued to grow,” Goldman’s Olivier Nicolaï told clients in a note on Tuesday.
Nicolaï noted, “Within overall US alcohol consumption, beer has been steadily losing share to spirits over the last 20 years. Within the spirits category, tequila has been gaining market share at the expense of vodka over recent years.”
Six decades of US per capita alcohol consumption data shows how war and economic misery can impact drinking rates among consumers. From the 1960s to the 1970s, the rate of alcohol consumption soared on a per capita basis, likely due to foreign wars and high inflation.
Fed Has Largely Won Inflation War: Moody’s
CPI surprises largely temporary, shouldn’t derail monetary easing
by James Langton
Advisor
While the latest U.S. inflation reading was stronger than expected, that upside surprise is unlikely to derail the U.S. Federal Reserve Board’s view that price pressures are cooling, says Moody’s Ratings.
In a new report, the rating agency noted that, despite the strong headline consumer price index (CPI) reading last week and the uptick in core inflation, much of the upside surprise was driven by temporary gains in certain volatile components of the index. Further, other details of the data were more encouraging.
“Importantly, shelter inflation, which has been particularly sticky, cooled to 0.2%, down sharply from 0.5% in August,” it said.
Additionally, the rise in core inflation “was driven up by one-off price jumps in the volatile goods and services sub-categories,” it noted.
Consumer Inflation Expectations Hit 40-Year High, Pressuring Fed Rate Plans
by Jordan Finneseth
Kitco
(Kitco News) – Interest rates and expectations for interest rate cuts have dominated financial headlines for several months, and while traders are occupied with dot plots and Fed speak, sentiment among U.S. consumers regarding inflation offers a potential warning sign that the Fed may actually be forced to hold or raise the benchmark rate if the cost of living begins to tick higher again.
“US consumers’ inflation expectations for the next 5-10 years skyrocketed to 7.1% in October, the highest in over 40 years,” noted analysts at The Kobeissi Letter. “This metric has DOUBLED in just several months, according to the University of Michigan Consumer Survey.”
Two-Thirds Of Economists Think Inflation Would Be Worse Under Trump Than Harris, Poll Finds
A majority of economists believe former President Donald Trump’s proposed economic policies would lead to higher inflation than those of Vice President Kamala Harris, according to a survey published Monday by the Wall Street Journal, findings which go against a far stronger inflation record under Trump than Joe Biden.
by Derek Saul
Forbes
Key Facts
– Some 68% of economists said inflation would be higher under Trump’s economic proposals than Harris, according to the Journal’s survey of 50 economists conducted Oct. 4-8.
– That compares to 12% who believed Harris inflation would be worse and 20% who didn’t anticipate a noticeable gap.
– It’s a wider gap than was found in a similar poll conducted July 5-9 before President Joe Biden exited the race, when 56% of economists said inflation would be worse under Trump than Biden compared to 16% for the opposite.