from AaronClarey
Trump Promised to Lower Prices. Will Congress Help Him Deliver?
At the current rate of inflation, the dollar will lose 33 cents of purchasing power within a decade.
by Veronique de Rugy
Reason.com
If President Donald Trump was elected with a specific mandate, it was to lower prices. Poll after poll reveals that inflation is a top worry for Americans. So the administration should be worried that it’s ticking back up. Further, the president—who seems to think he can solve all problems unilaterally with executive branch orders—will soon discover that to conquer inflation, he will need the help of Congress.
Today’s rising inflation isn’t Trump’s fault. When inflation first spiked several years ago, the Federal Reserve insisted for months that it was under control and on its way back to the 2 percent target. It had yet to arrive there when, this past September, the Fed began prematurely cutting interest rates by 100 basis points. Now core Consumer Price Index (CPI) inflation remains at 3.3 percent year over year, well above the pre-pandemic norm and a full 65 percent higher than the Fed’s supposed target.
Inflation Alert! Fed May Have to Slow or End Balance Sheet Reduction.
by Mike Maharrey
GoldSeek
Last month, the Federal Reserve paused interest rate cuts due to sticky price inflation. This indicates tighter monetary policy moving forward. However, market observers tend to ignore the second prong of monetary policy — the balance sheet.
Most people believe the Fed bowed out of the inflation fight and began easing monetary policy in September when it delivered its super-sized rate cut. In fact, the Fed began easing months earlier when it tapered balance sheet reduction, or quantitative tightening (QT), in June 2024.
Now it appears that even with hawkish talk about keeping monetary policy tighter for longer and slowing the pace of interest rate cuts, the central bank may be set to ease monetary policy even further despite inflation by further slowing or even ending balance sheet reduction.
U.S. Economy is Shutting Down Rapidly – Expect Widespread Unemployment and Much Higher Inflation
from King World News
The US economy is shutting down rapidly – expect widespread unemployment and much higher inflation.
THE U.S. ECONOMY IS SHUTTING DOWN RAPIDLY
February 26 (King World News) – Gregory Mannarino, writing for the Trends Journal: Business activity here in the U.S. and around the world has not just stalled, it is contracting.
This past Friday here in the U.S., the Business Flash PMI, by their own numbers, showed a sharp contraction in business activity. This most recent fall in business activity is following a drop in January of the Business Flash PMI to a nine-month low. Moreover, the S&P Global U.S. February flash services PMI came in at 49.7, vs an expected number of 53.0 (any reading below 50 indicates contraction).
New York Fed Research Flags New Inflation Vector From Tariffs On China Imports
by Michael S. Derby
Yahoo! Finance
NEW YORK (Reuters) – The U.S. economy could be in for a fresh inflation jolt if the Trump administration fully follows through with tariffs on Chinese imports, a New York Federal Reserve research paper said on Wednesday.
At issue is President Donald Trump’s announcement of import taxes on low-cost “de minimis” packages from China. Trump had sought to repeal the duty-free arrangements for these small-value goods entering the U.S., but then paused that action at the start of this month. The president has taken a similar approach with tariffs on other major U.S. trade partners.
The New York Fed paper argued that the small-scale shippers of Chinese products had been key to blunting the impact of tariffs during Trump’s 2017-2021 presidency.
Forecasts for January PCE Report Show Inflation Remaining Elevated
Fed could stay on hold for much of 2025.
by Sarah Hansen
Morningstar Advisor
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[…] Forecasts for the January Personal Consumption Expenditures Price Index report suggest overall inflation remains higher than Fed officials and investors would like.
In January, economists expect that overall PCE inflation rose 0.3% on a monthly basis and 2.5% on an annual basis, according to FactSet’s consensus estimates. They anticipate that the core measure of PCE inflation, which excludes volatile food and energy prices, rose 0.3% on the month and 2.6% on the year.
Even factoring annual seasonal adjustment into the data, Nationwide financial market economist Oren Klachkin says inflation is still looking sticky thanks to strong economic conditions. “When you have an economy that continues to run relatively well, the side effect of that is that inflation continues to run high,” he explains. “That is the kind of environment we were in late last year, and I think that is still the case now … we’re still in a relatively elevated inflation environment overall.” Klachkin’s team is expecting 0.3% monthly growth for both the overall and core measures of PCE.
It’s Jobs, Personal Finances and Inflation
Assessments of personal finances were up for the fifth consecutive month in January.
by Jack Atzinger
Trade Only Today
Both of the country’s primary measurements of consumer sentiment in January showed that although Americans were more positive about their personal financial situations, they were pessimistic about the future of the job market and inflation, dragging the overall indexes down.
The Conference Board said its Consumer Confidence Index declined 5 points, to 104.1, from an upwardly revised 109.5 in December. “Consumer confidence has been moving sideways in a relatively stable, narrow range since 2022. January was no exception,” Dana M. Peterson, chief economist at The Conference Board, stated in a press release.
“All five components of the index deteriorated, but consumers’ assessments of the present situation experienced the largest decline,” Peterson added.
Consumer Confidence Tumbles as Inflation Persists, Challenges Trump
from Fairfield Sun Times
Consumer confidence fell in February with its biggest dip since 2021.
Inflation (including housing costs and record-high egg prices) continue to challenge American households.
Americans were very pessimistic about the economy in public opinion polls leading up to President Donald Trump’s November victory.
Those dour economic views persist with some public opinion polls showing voters wanting Trump to focus more on lowering prices.
The Conference Board’s Consumer Confidence Index dropped 7.0 points in February — including the first short-term popular pessimism toward jobs, business conditions and income levels.
Consumer Confidence Sinks as Inflation Fears Mount
by John Carney
Breitbart.com
U.S. consumer confidence slid sharply in February, posting its steepest decline since August 2021, as Americans grew increasingly concerned about rising prices, weakening job prospects, and the broader economic outlook.
The Conference Board’s Consumer Confidence Index fell 7 points to 98.3, marking its third consecutive monthly decline and falling below economists’ expectations.
More troubling, the Expectations Index—a measure of consumers’ short-term outlook—dropped 9.3 points to 72.9, falling below the level historically associated with a looming recession for the first time since June 2024.
Stocks and bond yields slipped after the report, reflecting heightened investor concerns over economic momentum.
Sticky Inflation Means Gold Will Keep Rising
by Byron King
Daily Reckoning
How much gold do you own? The correct answer is: “Not enough.”
Don’t you wish you had some of these? This is a $20 gold coin from 1914, the first year of the Federal Reserve. And back then, just over 110 years ago, gold was $20 per ounce.
[…] Today’s gold price is over $2,900, which means that the purchasing power of a dollar over the past century-plus has shrunk by a factor of 145x. In other words, a single dollar back in 1914 is the equivalent of $145 today. This is why people and institutions (certainly central banks) are buying gold. And it’s why gold deserves a place in every portfolio.
Let’s dig into what’s happening with gold, what it means, and how to deal with it.
U.S. Fiat Money: A Worthless Find for Future Archeologists
by Mike Maharrey
GoldSeek
If archeologists 2,000 years from now find a jar of U.S. quarters minted in 2025, how excited would they be?
I’m sure they would find it interesting from a historical perspective. But how much would those quarters really be worth?
I got to thinking about this after reading about a recent archeological find in the Netherlands. Two people searching a field with metal detectors found hundreds of Roman-era gold and silver coins.
According to CBS News, the find included a mix of Roman and British coins. The majority were silver Roman denarii minted between 200 B.C. and 47 A.D. There were also 72 gold aurei dated from 18 B.C. and 47 A.D. These gold coins showed no sign of wear and were likely freshly minted according to archeologists who analyzed the find.