from Forbes Breaking News
Republicans Hammer Joe Biden’s ‘Cruelest Tax’: Inflation
by John Carney
Breitbart.com
Republicans focused their attention on inflation and President Joe Biden’s economy on Monday night at the Republican National Convention in Milwaukee, Wisconsin.
The economy, suffering from the worst inflation in four decades, is a key weakness for incumbent President Joe Biden. Surveys show Americans are deeply dissatisfied with Biden’s economic leadership and do not trust his economic agenda to improve their households’ financial situation or the country’s.
“They have imposed what Ronald Reagan called the cruelest tax on the poor: inflation,” said Rep. Wesley Hunt (R-TX) in a speech to the convention. “Today, 65 percent of Americans are living paycheck to paycheck because the dollar is worth less and less every day.”
Powell Says Federal Reserve is More Confident Inflation is Slowing to Its Target
by Christopher Rugaber
Yahoo! Finance
“We’ve had three better readings, and if you average them, that’s a pretty good pace,” Powell said of inflation in a question-and-answer question at the Economic Club of Washington. Those figures, he said, “do add somewhat to confidence” that inflation is slowing sustainably.
Powell declined to provide any hints of when the first rate cut would occur. But most economists foresee the first cut occurring in September, and after Powell’s remarks Wall Street traders boosted their expectation that the Fed would reduce its key rate then from its 23-year high. The futures markets expect additional rate cuts in November and December.
How Corporate Bailouts Inflate the Money Supply
by Lennart Wagemans
Mises.org
Many claim the problem with fractional reserve banking is that it loans money into existence. It does, but under normal circumstances the money created by commercial banks disappears when loans are repaid or defaulted on, which therefore doesn’t create a permanent inflation of the money supply. Government intervention, however, converts temporary money into permanent money through bailouts like TARP. They purchase loans that would have been defaulted on, preventing the evaporation of credit. When banks hold loans that are at risk of default, they face having to write them off, which would remove this part of the money supply. Bailouts turn such disappearing credit into permanent money, in effect giving banks free money.
Without government bailouts, banks would be unwilling to make loans that are unlikely to be repaid, thus limiting their willingness to loan large amounts of money into existence. This would keep the money supply more stable. At any time, some part of the money in existence would still be destined for removal through repayment, this proportion would somewhat fluctuate with economic conditions, and the temporary money would be indistinguishable from other money until a loan is repaid, but new money would not continually get loaned into existence.
U.S. Inflation Cools Again, Potentially Paving Way for Fed to Cut Interest Rates Soon
Inflation in the United States cooled in June for a third straight month, a sign that the worst price spike in four decades is steadily fading and may soon usher in interest rate cuts by the Federal Reserve
by Christopher Rugaber
ABC News
WASHINGTON — Inflation in the United States cooled in June for a third straight month, a sign that the worst price spike in four decades is steadily fading and may soon usher in interest rate cuts by the Federal Reserve.
In a better-than-expected report, consumer prices declined 0.1% from May to June after having remained flat the previous month, the Labor Department said Thursday. It was the first monthly decline in overall inflation since May 2020, when the economy was paralyzed by the pandemic.
Measured from one year earlier, prices were up 3% in June. Cooler than the 3.3% annual rate in May.
The latest inflation readings will likely help convince the Fed’s policymakers that inflation is returning to their 2% target. A brief pickup in inflation early this year had caused the officials to scale back their expectations for interest rate cuts. The policymakers said they would need to see several months of mild price increases to feel confident enough enough to cut their key rate from its 23-year high.
Charted: Inflation Across U.S. Fast Food Chains (2014-2024)
by Kayla Zhu
Visual Capitalist
Inflation Across Fast Food Chains from 2014 to 2024
This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.
Fast food joints were once the go-to option for quick, cost-friendly meals, but now, they’re starting to pinch the budget.
Inflation has hit fast food chains hard in the past decade, with many restaurants seeing an average price increase on menu items of more than 50%.
This graphic visualizes the average price increase of 10 core menu items from select American fast food chains, as well as the change in the consumer price index (U.S. city average) for food away from home, from 2014 to 2024.
Breitbart Business Digest: Inflation’s Surge Dims Biden Election Hopes
by John Carney
Breitbart.com
Inflation Also Rises
When we warned yesterday that there were still upside risks to inflation despite two months of weaker than expected reports, we did not expect to see our view confirmed the very next day.
Yet that’s exactly what happened in today’s producer price index (PPI) report from the Bureau of Labor Statistics. The index for final demand jumped by 0.2 percent in June, twice what was expected. In addition, there were significant upward revisions to the previous month’s PPI, moving the headline final demand up from a 0.2 percent decline to a flat reading.
The year-over-year PPI gain for PPI rose to 2.6 percent, the highest 12-month increase since March 2023. The index has now been rising for five consecutive months, calling into question the idea that inflation is on a path to two percent.
Inflation Data Sparks Rush for Gold, Real Estate, Treasuries, Yen: Traders See September Rate Cut as Done Deal
CPI inflation rate falls from 3.3% in May to 3% in June, the lowest since April 2021, missing the 3.1% estimate.
by Piero Cingari
Benzinga.com
The stars seem to be aligned for a reduction in U.S. interest rates in about two months, as the June inflation report released Thursday may provide policymakers with the confidence that annual consumer price changes are finally trending toward the Fed’s 2% target.
The inflation rate fell from 3.3% in May 2024 to 3% year-over-year in June 2024, the lowest since April 2021, according to the Bureau of Labor Statistics. The outcome fell short of the estimated 3.1%. On a month-over-month basis, the consumer basket contracted by 0.1%, marking the first negative reading since May 2020.
The data sparked a surge in rate cut bets, triggering a rally in interest-rate-sensitive assets.
Welcome to Inflationary Depression
by Jeffrey Tucker
Daily Reckoning
There was an oblique message buried in a recent New York Times story on the growing crisis in commercial real estate in cities.
Yes, this is exactly the kind of article that people pass over because it seems like it doesn’t have broad application. In fact, it does.
It affects the core of issues like our city skylines, how we think about urbanism and progress, where we vacation and work and whether the big cities are drivers or drains on national productivity.
The note mentions the “broader distress brewing in the commercial real estate market, which is hurting from the twin punches of high interest rates, which make it harder to refinance loans, and low occupancy rates for office buildings — an outcome of the pandemic.”
Consumer Prices Decline in June
by Alexander William Salter
The American Institute for Economic Research
The Federal Reserve is trying to engineer a gradual disinflation. It is getting outright deflation. The Bureau of Labor Statistics reported that the Consumer Price Index (CPI) decreased 0.1 percent in June. Consumer prices have grown 3.0 percent over the last year, which is the lowest 12-month rate since March 2021.
Core CPI, which excludes volatile food and energy prices, increased 0.1 percent. Year-over-year core inflation was 3.3 percent, the lowest since April 2021.
[…] Headline price decreases, driven by monetary tightening, are not necessary to get us back to the Fed’s target 2 percent growth path, but they do facilitate a quicker return. We may have reached a definitive point in policymakers’ (self-imposed) struggle against excessive dollar depreciation.
What is Happening with Gold and the U.S. Dollar is Absolutely Stunning
from King World News
On the heels of the failed assassination attempt on former President Donald Trump, what is happening with gold and the US dollar is absolutely stunning.
July 14 (King World News) – Matthew Piepenburg, partner at VON GREYERZ AG: Between politics (driven by self rather than public servants), markets (driven by debt rather than profits) and currencies (diluted by over-creation rather than chaperoned by a real asset), it is fair to say we live in not interesting but surreal times.
But amidst the surreal, the dollar, as many believe, is our rock, our immortal albeit often unloved constant.