from NBC News
Federal Reserve’s Path to 2% Inflation Could Be Short but Tricky
by Kristin Schwab
Market Place
The Federal Reserve will start its annual conference of central bankers in Jackson Hole, Wyoming, on Thursday, and the central topic will be inflation and interest rates. Clues may emerge about whether the Fed will begin cutting in September.
The July consumer price index did make a cut appear more likely. It came in at 2.9% over the prior 12 months. But, of course, that’s not 2% — the Fed’s inflation target — which means there’s still some ways to go. How hard will it be to get there?
To understand what the Fed is up against in the coming months, year or however long it takes, it’s helpful to understand why the Fed may start paring interest rates before inflation hits 2%.
If Joe Biden Saved the Economy, Why Do We Need Kamala Harris’ Price Controls?
Democrats are pushing a jarringly disconnected economic message.
by Eric Boehm
Reason.com
After all the talk of abortion rights, protecting democracy, and how “fun” Vice President Kamala Harris apparently is, the first night of the Democratic National Convention culminated with a celebration of President Joe Biden’s four years in office.
Biden “recovered all those millions of jobs that [Donald] Trump watched slip away,” Sen. Dick Durbin (D–Ill.) declared. Biden “rebuilt the economy” after the pandemic put it “flat on its back,” intoned Sen. Chris Coons (D–Conn.), a longtime Biden stan.
Biden himself put the cherry on top. “We’ve had one of the most extraordinary four years of progress ever,” the president said. “We gone from economic crisis to the strongest economy in the entire world,” he claimed, pointing to job creation figures, economic growth, higher wages, and “inflation down, way down, and continuing to go down.”
Do We Need 3% Inflation? Economic Growth and Deflation
by Paul F. Cwik
Mises.org
“As long as it is kept within certain limits, inflation is an excellent psychological support of an economic policy which lives on the consumption of capital.” (Ludwig von Mises, Socialism, pp. 448-9)
What causes economic growth? Is it a reduction in tariffs? Is it a cut in tax rates? Is it cutting red tape and bureaucracy? While each might stimulate or encourage economic growth, none of these choices causes growth. Economic growth is the result of an entrepreneur employing a new method that reduces the cost of production. Costs can be reduced in several ways. Newly discovered resources will reduce costs. A new technique that saves time, labor, or resources also reduces costs. And, often overlooked, are the cost reductions, which come from resource allocation according to the law of comparative advantage.
To clarify, suppose that there is an entrepreneur who can make 1,000 units of cloth per day. If this entrepreneur spends $5,000 per day in wages and on maintenance of the capital equipment, then his average cost of production is $5 per unit of cloth.
Harris Zeroes in On High Food and Housing Prices as Inflation Plays a Big Role in the Campaign
Vice President Kamala Harris is zeroing in on high food and housing prices as her campaign previews an economic policy speech coming up in North Carolina
by Zeke Miller
ABC News
WASHINGTON — Vice President Kamala Harris is zeroing in on high food and housing prices as her campaign previews an economic policy speech Friday in North Carolina, promising to push for a federal ban on price gouging on groceries and laying out plans to cut other costs as she looks to address one of voters’ top concerns.
Year-over-year inflation has reached its lowest level in more than three years, but food prices are 21% above where they were three years ago. Republican presidential nominee Donald Trump has pointed to inflation as a key failing of the Biden administration.
The cost of housing is another major driver of inflation, and Harris plans to use federal resources to promote the construction of 3 million new housing units if elected, pass legislation to slow rent increases, and provide a $25,000 in down-payment assistance for first time homebuyers.
Thanks to the Cost of Living Crisis, U.S. Household Debt Has Soared to the Highest Level Ever Recorded
by Michael Snyder
The Economic Collapse Blog
Our entire economy is fueled by debt. In fact, if going into more debt was suddenly banned the U.S. economy would instantly hit a brick wall. For the vast majority of us, our lifestyles simply cannot be funded by what we actually make. So we use debt to bridge the difference, and this has particularly been true during the cost of living crisis. Total household debt has now reached a grand total of 17.8 trillion dollars, and we continue to pile up more with no end in sight…
A quarterly report published this month by the Federal Reserve Bank of New York on household credit and debt found that between the first quarter of 2021 and the second quarter of 2024, credit card debt surged 48.1% while household debt — which includes mortgages and auto loans — rose by 21.6%.
Donald Trump: Kamala Harris Said Inflation Will Be ‘Day One Priority,’ but Her Day One Was Over Three Years Ago
by Hannah Knudsen
Breitbart.com
Americans should not believe Vice President Kamala Harris when she says that inflation will be a “day one” priority for her because her “day one” was three-and-a-half years ago when she and President Joe Biden took over the White House, former President Donald Trump said during a rally in Asheville, North Carolina, last week.
Trump talked about the impact of inflation on the American people, largely identifying it as the most important subject for Americans.
“Inflation is the most important, but that’s part of economy,” Trump said, asking voters if they can really trust Harris to tackle that issue when the Biden-Harris administration has failed to do so since getting into office.
Ready, Fire, Aim: Inflation’s Crucial Threshold
by Louis Cannon
Pagosa Daily Post
A few weeks ago, Wall Street was panicking. Now, the U.S. looks to be in soft-landing territory with inflation falling below a crucial threshold as the country nears the end of its battle back from the pandemic’s economic aftermath…
— from the Weekend Reading newsletter by Bloomberg News, August 17, 2024.
I recently subscribed to the Bloomberg News newsletter for a couple of reasons.
One, it was free to subscribe.
And two, I thought I should learn something about business and investing, now that I’m over 60 and looking forward to retiring. I understand that when you retire, you find yourself looking for things to do, to fill your time, and I figured making myself rich could be a reasonable way to beat back the boredom.
One thing I’ve learned already: 2.9% inflation is a crucial threshold.
But then, I wanted to know why it’s a crucial threshold.
Kamala Harris’ Dishonest and Stupid Price Control Proposal
Government intervention caused inflation, and it threatens to make matters worse.
by J.D. Tuccille
Reason.com
When you’ve caused a problem, deflect! At least, that seems to be the strategy of Vice President and Democratic presidential candidate Kamala Harris, who spent the last several years as part of an administration that presided over a growing mismatch between Americans’ pay and the cost of living. Rather than take responsibility for the decline of the dollar’s purchasing power, she blames businesses that were forced to raise prices as a result. And she wants to fix the problem she helped cause by restricting those prices, never mind the inevitable consequences for the availability of goods and services.
Wait, I Thought This Was an Economy To Be Proud Of?
First though, let’s journey back to 2023 when Harris claimed to be proud of the state of the economy.
A Recession the Yield Curve Predicted (Again)
by Richard M. Salsman
The American Institute for Economic Research
There’s strong and growing evidence that the “next” US recession has begun — or will begin soon. Of course, many economists will remain unsure about it, having not forecasted it, or because they refuse to forecast, or because they don’t believe something’s real until it passes them by (perhaps not even then). Similarly tardy will be the National Bureau of Economic Research, but that’s by design, because it assigns “official” dates to the start and finish of each recession and wants to be sure about the final status of oft-revised economic data before it makes its public pronouncements. Such “back-casting” and even “nowcasting” (offered by the New York Fed) are little help to those who prefer foresight and time to adjust before trouble begins.
Roughly a year ago, I reminded AIER readers that the US Treasury yield curve was inverted (i.e., the 10-year bond yield was lying below the 3-month bill rate), that all eight US recessions since 1968 were preceded (12-18 months) by such an inversion (with no false signals of recession arising without a prior inversion), and that another recession would likely begin in 2024. I wrote:
Not Just for Kids Anymore: Adults Turn to Lemonade Stands as Side Hustles
Entrepreneurial people in their 20s and 30s are setting up stands at farmers markets and festivals to pay their bills — and can make serious money.
by Amber Ferguson
Washington Post
There was no ice at Giant. There was no ice at CVS. And Malia Blake was getting anxious.
Her new side hustle, intended to help her climb out of debt, was inspired by a woman she saw on TikTok do this to pay for pharmacy school. It depended on four ingredients: ice, water, sweetener and lemons.
With her SUV filled with tables, bags of lemons she got from Costco and flavored syrups she bought off Amazon, Blake pulled into a 7-Eleven parking lot in Southeast Washington and ran inside. Tucked in the back of the store was a freezer.
“Yay, they have it!” Blake takes a deep exhale. “I think I’ll get five or six bags. That would have been a disaster if they didn’t have it.”