Inflation is Exhausting
Feeding the family in an era of Washington mismanagement.
by James Freeman
The Wall Street Journal
“McDonald’s Seeks to Make Menu More Affordable for Inflation-Weary Consumers,” reads a Journal headline today. Sometimes folks in the restaurant industry refer to such consumers as “price-weary.” However they are described, parents on a budget are tired of having to send too many dollars chasing after too few burgers. The Journal’s Heather Haddon reports:
McDonald’s said consumers across the globe are tightening their spending as the burger chain reported lower-than-expected quarterly sales growth.
Executives said Tuesday that economic pressure is building on consumers, resulting in declining restaurant visits across the industry. McDonald’s for months has warned of a weakening economy, but executives said the headwinds so far this year are steeper than previously anticipated…
Three Savings Moves to Make with Inflation Still Rising
by Joshua Rodriguez
CBS News
Inflation has been a cause for concern for some time now. In fact, in mid-2022, the Federal Reserve increased its target federal funds rate for the first time since 2018 in response to high COVID-era inflation. Since then, it has increased its benchmark rate several times, pushing it to a 23-year high, where it still stands today.
Though inflation seemed to be dwindling toward the end of 2023, price growth has gained a second wind with inflation coming in hot thus far in 2024. And while high inflation rates may make budgeting more difficult and debt more expensive, they can also make returns on deposit accounts more attractive.
With the federal funds rate high, earnings on some deposit accounts can outpace inflation.
McDonald’s Earnings Dragged Down By Inflation and Israel-Hamas War Boycotts
by John Carney
Breitbart.com
Inflation and war in the Middle East took some of the shine off the Golden Arches in the first quarter of the year.
On Tuesday, McDonald’s said first-quarter adjusted earnings came in at $2.70 per share for the first three months of the year, missing the consensus forecast of $2.72.
McDonald’s rarely misses earnings forecast. Shares of the fast-food company slid in early morning trading following the results but were nearly flat by midday even while the broader market slumped.
The company raised prices by 10 percent last year. Over the past decade, prices have nearly doubled, according to some analysts.
Workers’ Paychecks Grew Faster in the First Quarter, a Possible Concern for the Fed
by Christoph Rauwald
Yahoo! Finance
Compensation as measured by the government’s Employment Cost Index rose 1.2% in the January-March quarter, up from a 0.9% increase in the previous quarter, the Labor Department said Tuesday. Compared with the same quarter a year earlier, compensation growth was 4.2%, the same as the previous quarter.
The increase in wages and benefits is good for employees, to be sure, but could add to concerns at the Fed that inflation may remain too high in the coming months. The Fed is expected to keep its key short-term rate unchanged after its latest policy meeting concludes Wednesday.
Man Who Oversees $150 Billion Just Warned We May See Terrifying Hyperinflation
from King World News
Today the man who oversees $150 billion warned King Word News that we may see terrifying hyperinflation.
May 1 (King World News) – Rob Arnott, Chairman of Research Affiliates: “Weimar Germany had hyperinflation — had the Deutschmark catastrophically collapse. And overnight they moved back to a gold standard. And overnight the entire hyperinflation disappeared. So inflation and hyperinflation are always a policy choice…
Five Areas Where Inflation is Highest
Fuel and electricity are among the areas where inflation has been the biggest pain for Americans.
by Wayne Duggan
US News
For more than three years, readings from the U.S. consumer price index, or CPI, have been well above the Federal Reserve’s long-term inflation target of 2%. Americans have likely noticed prices surging for goods and services ranging from groceries to insurance to housing to transportation. Unfortunately, inflation has hit certain industries and commodities harder than others.
The U.S. Labor Department breaks down the monthly CPI reading into several subcategories. Here’s a look at the five subcategories that have averaged the highest annual inflation rates over the past three years and some public companies that have been impacted by rising prices.
Changing Central Bank Pressures and Inflation
by Hassan Afrouzi, Marina Halac, Kenneth Rogoff, and Pierre Yared
CEPR
Despite the large surge in inflation across advanced economies since 2021, long-term expectations are mostly in line with central bank targets. However, this column argues that the factors which facilitated low average inflation for decades have started to reverse. These include globalisation, de-unionisation, and a deepening of the Washington consensus including especially fiscal restraint. Using a theoretical model, supported by broad empirical evidence on changing fundamentals, it demonstrates the relationship between economic and political factors, long-run inflation, and transitions between steady states. The growing tension between central banks and democratically elected politicians can make low and stable inflation more difficult to achieve in the future, with negative consequences for economic activity.
ECB’s Guindos Says Inflation Outlook Faces ‘Substantial Risks’
by Andrew Langley
BNN Bloomberg
(Bloomberg) — The European Central Bank faces significant dangers to achieving its inflation goal, according to Vice President Luis de Guindos, who cited factors that could pull prices too far in either direction.
“While we expect inflation to return to our 2% target next year, the outlook is surrounded by substantial risks,” the Spanish official said Monday. “The geopolitical situation, especially in the Middle East, poses a particular upside risk to inflation.”
Among other such factors, he listed corporate profit margins and upward pressure on salaries in the euro area. Downside risks include a stronger-than-anticipated dampening impact of monetary policy on demand, or an unexpected worsening of the global economic backdrop, Guindos said in London.
The Fed’s Game of “Make Believe” Comes to an End
by James Hickman
Schiff Sovereign
It’s barely been a year since the 2023 bank crisis in which several large banks, including Silicon Valley Bank and Signature Bank, failed.
At the time, I wrote that the bank failures weren’t over, and that there would be more.
But it’s been quiet for most of the last year; the banking system has been pretty calm thanks in large part to an emergency program that the Federal Reserve created to bail out other troubled banks.
They called it the Bank Term Funding Program (BTFP), and it essentially expired a few weeks ago. In other words, no more emergency lending to troubled banks.
Why the Fed Looks Likely to Scramble Back to a Hawkish Stance
With inflation looking sticky, where does the Fed go now?
by Greg Robb
Market Watch
His blunt, hawkish remarks now seem like a distant memory. Over the past six months, Powell and his colleagues have been leaning dovish, strongly hinting they were preparing to cut interest rates.
“They kind of came out and did a victory lap a little too soon,” said Ellen Meade, a former top Fed staffer and now an economics professor at Duke University.
That’s likely going to change this week, economists said.