from CBS News
Dem Rep. Smith On Stock Market: Fed Should Cut Rates, ‘Inflation is Down Pretty Close to Zero’
by Ian Hanchett
Breitbart.com
On Monday’s broadcast of “CNN News Central,” Rep. Adam Smith (D-WA) responded to the tumble in the stock market by stating that the Federal Reserve needs to cut interest rates and “inflation is down pretty close to zero. And now, you have opposite pressures on the market and I think the Fed should respond and I think they will respond.”
Co-host John Berman asked, “Congressman, just one quick question about what we’re seeing in the markets right now, how do you feel when you look at these numbers drop this morning on what are now global fears about the U.S. economy?”
Smith answered, “Well, I think it’s time to bring interest rates down. I think your analysis of your guests there is spot on. We’ve seen an economy that has been remarkably strong coming out of COVID. They’ve been predicting recessions for several years, they haven’t happened now.
Despite the Recession-Emergency-Rate-Cut Buffoonery, the Services Sector Expands Strongly On Growth in New Orders & Employment. Inflation Pressures Still On.
by Wolf Richter
Wolf Street
What a bummer. Services are two-thirds of the economy; as long as they’re firm, the economy will plug along just fine, even as manufacturing stalled.
US service sector activity, driven by new orders and rising employment, expanded strongly in July, according to two measures of the service sector released today: The ISM Services PMI and S&P’s US Services PMI (formerly the Markit Services PMI).
The way these Purchasing Manager Indexes (PMIs) are structured, a value of 50 means no change, a value higher than 50 means growth, and a value below 50 means decline. The higher the value above 50, the faster the growth. The measurement is month-to-month.
What’s Harris’ Plan to Fight High Food Prices?
by Meredith Lee Hill and Grace Yarrow
Politico
[…] HARRIS’ FOOD PRICE FIGHT: Democrats on Capitol Hill are eager for Vice President Kamala Harris to focus on fighting high food prices in her campaign. And progressives are highly encouraged by recent comments the presumptive Democratic nominee made on the campaign trail as a sign she might do just that, your host reports.
Harris told a packed campaign rally in Atlanta last week that she would “take on price gouging and bring down costs” on “Day One” of her presidency.
That got the attention of progressives, who hope the vice president will be more willing than President Joe Biden to wield executive power to squeeze corporations they argue have been inflating the price of groceries and other everyday goods.
Fed’s Daly: More Confident Inflation is On the Path to 2%
by Lallalit Srijandorn
FX Street
Federal Reserve Bank of San Francisco President Mary Daly said on Monday that she is more confident US inflation is on course to the Fed’s 2% target, per Reuters.
Key quotes
Risks to Fed’s mandates are getting in more balance.
Minds are open to cutting rates in coming meetings.
Concern is that we will deteriorate from current place of balance in jobs report; we don’t see that right now.
July jobs report reflected a lot of temporary layoffs, hurricane effect.
The Speed of Firm Response to Inflation
by Ivan Yotzov, Nicholas Bloom, Philip Bunn, Paul Mizen, and Gregory Thwaites
CEPR
Firm inflation expectations are a key driver of future price growth. This column uses a large economy-wide business survey to understand the response of firms to monthly CPI inflation releases in the UK. Firms’ CPI inflation perceptions respond very quickly, in a matter of hours after the CPI release. Expected own-price growth also responds strongly to changes in CPI inflation. Expectations are more responsive to CPI data releases when inflation is high. The results are consistent with several mechanisms, including (i) higher responsiveness when inflation media coverage is elevated, (ii) a desire to maintain relative prices, (iii) recent inflation driven by supply-side shocks, and (iv) an expectation of higher borrowing costs in response to higher inflation.
Denny’s ‘Lumberjack Slam’ Platter Triples in Cost, Rising to $18 Amid Inflation
by Amy Furr
Breitbart.com
A Denny’s breakfast platter has apparently become extremely expensive amid choking inflation and labor costs.
A post on Reddit shows an image of the restaurant’s menu where the price of the Lumberjack Slam sits at $17.99, the New York Post reported on Friday, noting that a decade ago, the meal cost around $5.99:
[…] Click here to see the post.
“The hefty price tag doesn’t include the premium option of upgrading the pancakes to double berry banana, cinnamon roll, or ‘choconana’ for an extra $3.09, which would bring the pre-tax, pre-tip total to $21.08,” the Post article said, noting the location of that particular restaurant was unknown.
Social media users were quick to comment on the Post report, one person writing, “That’s bidenomics.”
Inflation Math is Changing America’s Dinner Plans
by Alina Selyukh
NPR
Higher prices have Americans reconsidering their dinner and coffee.
For the first time in years, people’s grocery hauls are getting bigger. And many are choosing to splurge a bit at the supermarket over going out to eat, prompting fast-food and other chains to step up deals and meal combos.
This week, McDonald’s reported its first decline in sales since the COVID-19 pandemic shutdowns of 2020. Sales at Denny’s dipped 0.6%, and profit at Wendy’s declined in the latest quarter. Starbucks sales fell 2% in the U.S. as people came in less often.
“When [restaurant inflation is] still ahead of where grocery inflation is,” Denny’s CEO Kelli Valade told investors this week, “we definitely feel like people are probably still saying, ‘I should just cook at home a little bit more often.'”
Why No One Actually Predicted the 2021 ‘Inflation’
by John Tamny
Forbes
“The central bank didn’t predict the inflation that started to arrive in earnest in early 2021 and didn’t predict how durable it would be.” Those are the words of Joseph Sternberg at the Wall Street Journal on Friday, and they’re insufficient.
What Sternberg should have written was that “Neither the central bank nor the self-congratulatory pundits who claim they predicted inflation actually predicted the inflation that the Federal Reserve also didn’t predict. And they didn’t predict the ‘inflation’ because it wasn’t inflation.”
To see why, let’s just traffic in reality. Left and right who claim they predicted inflation based it on a surge of demand that allegedly followed a surge in government spending under a newly-inaugurated President Biden in 2021.
Central Banks Purchase Gold to Offset Their Own Money Destruction
by Daniel Lacalle
Mises.org
Why is the price of gold rising if the global economy is not in recession and inflation is allegedly under control? This is a question often heard in investment circles, and I will try to answer it.
We must begin by clarifying the question. It is true that inflation is slowly decreasing, but we cannot say that it is under control. Let us remember that the latest CPI data in the United States was 3% annualized and that in the eurozone it is 2.6%, with eight countries publishing data above 3%, including Spain.
This is why central banks need to give the impression of hawkishness and maintain rates or lower them very cautiously. However, monetary policy is far from being restrictive. Money supply growth is picking up, the ECB maintains its “anti-fragmentation mechanism,” and the Federal Reserve continues to inject money through the liquidity window. We can say, without a doubt, that monetary policy is beyond accommodative.
Proposed New York City Hotel Regulation Threatens to Push Prices Even Higher
With prices skyrocketing, the city is weighing whether to regulate hotels further by barring them from hiring contracted workers.
by Emma Camp
Reason.com
Since banning most short-term rentals in 2023, New York City has seen hotel prices skyrocket. Now the city is considering a measure that would almost certainly force prices even higher.
The bill, proposed by New York City Councilwoman Julie Menin, targets non-union hotels, prohibiting hotel owners from hiring contracted workers for many positions, such as housekeeping, security, and bartending. The measure would require hotel owners to directly employ these workers rather than rely on cheaper subcontracting services.
Further, the proposed law would also require all hotels to obtain a license in order to operate. As a condition of licensing, hotels would need to hire a 24-hour security guard, who is also licensed.