from The Rich Dad Channel
What Would Trump Have to Do to Defeat Inflation? Maybe Nothing.
President Donald Trump promised to “end inflation” and “immediately bring prices down” during his election campaign, but that hasn’t happened yet.
by Diccon Hyatt
Investopedia
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The public is showing signs of impatience for President Donald Trump to fulfill his campaign promises to solve inflation, but it might be on its way down all on its own.
A CNN poll last week showed 62% of U.S. adults believe President Donald Trump has not gone far enough to reduce the price of everyday goods. Inflation heated up unexpectedly in January, rising to a 3% year-over-year increase (compared to around 2% a year before the pandemic).
Trump, who won in the November elections on a wave of voter anger about inflation, pledged to “immediately bring prices down” and “end inflation” on day one of his presidency.
Ahead of Nvidia Earnings, Stocks Slide as Investors Eye Inflation Data
Stocks Declined Sharply As Investors Await Key Economic And Earnings Reports
by JJ Kinahan
Forbes
Stocks fell sharply on Friday and all the major indices ended the week lower. The S&P 500 lost 1.5% for the week. The Nasdaq Composite dropped 2.5%. Small caps were hit hardest, dropping 2.5%, while the Dow Jones Industrial Average fell 2.5%. While last week lacked any significant economic data or earnings news, this week has several items of note.
On the economic calendar, tomorrow, the Conference Board will release its latest read on Consumer Confidence. The Durable Goods report for January comes out Thursday. However, the most important report of the week and the Federal Reserve’s preferred gauge on inflation, Personal Consumption Expenditures , is due out Friday morning. Heading into the week, there is a better than 97% chance the Fed will leave interest rates unchanged when they meet in March, according to the CME FedWatch Tool. As of now, the earliest point at which we may see a rate cut is not until June. I’ll be watching to see if these numbers change at all by the time the week ends.
Fed Expected to Respond Strongly to Inflation, Job Market Conditions, Research Shows
by Reuters
Yahoo! Finance
The Fed’s perceived responsiveness to economic data picked up notably in 2022, driven first by inflation data and, last year, by labor market data, based on the analysis of perceptions embedded in professional forecasts and in bond market moves published in the regional Fed bank’s latest Economic Letter.
The findings are in line with the Fed’s actual response to inflation, which rose in 2021 but did not trigger any interest rate hikes until 2022.
What’s the Relationship Between Commodity Prices and Inflation?
Data suggests commodity prices have a relatively high positive correlation to the Personal Consumption Expenditures (PCE) price index.
by Dr. Mark Shore
Institutional Investor
As commodity prices fluctuate in response to supply and demand, and inflation continues to rise, a key question arises: How closely do commodity prices track inflation indicators?
[…] Since the financial crisis, core inflation remained stable around the PCE’s 2% target until April 2021 when inflation surged globally due to pandemic-related supply chain disruptions and changing consumption patterns. By summer and fall 2022, inflation peaked between 5.6% and 9.1%, depending on the index. Inflation began to decline, reaching a temporary low in late 2024.
[…] The Bloomberg Commodity Index (BCOM) hit its lowest point in March and April 2020, rebounded to pre-pandemic levels by January 2021 and peaked in June 2022. BCOM then declined by about 32%, hitting a recent low in September 2024, returning to August 2021 levels.
E.U. Inflation Ticks Upward in January
The European Central Bank warned inflation rates may be sporadic before reaching a 2% annual goal in 2025.
by Gabriel Tynes
Courthouse News
(CN) — Annual inflation in the eurozone and European Union is drifting away from a 2% goal established by the European Central Bank in 2024. According to a report released Monday by Eurostat, the annual inflation rate climbed to 2.5% in the eurozone in January and 2.8% in the broader European Union.
The rates have been climbing since they dipped to three-year lows in September 2024. At the time, ECB President Christine Lagarde predicted the rates would climb again for several months before reaching the bank’s 2% medium-term target in 2025.
The highest rates in January were recorded in Hungary (5.7%), Romania (5.3%), and Croatia (5%), while the lowest rates were recorded in Denmark (1.4%) and Ireland, Italy, and Finland, all of which saw 1.7% annual inflation.
Is the Federal Reserve’s Preferred Measure of Inflation Set to Fall?
Market Questions is the FT’s guide to the week ahead
by Jennifer Hughes, Arjun Neil Alim, and Ian Smith
FT
Core inflation, as measured by the consumer price index, rose to 3.3 per cent in January on a year earlier, above expectations of a 3.1 per cent rate, leading investors to scale back their bets on interest rate cuts this year. A sharp rise in the cost of eggs, as farmers fight an outbreak of avian flu, was a big driver of the surprise reading.
But while the personal consumption expenditures index, which uses a different methodology, is expected to show prices rising 0.3 per cent month-on-month, up from a rate of 0.2 per cent, according to a poll by Reuters, the annual rate is expected to fall to 2.6 per cent from 2.8 per cent.
Breitbart Business Digest: DOGE Dividends Won’t Be Inflationary
by John Carney
Breitbart.com
Disinflationary DOGE Dividends
President Donald Trump is considering returning 20 percent of the savings identified by the Department of Government Efficiency (DOGE) directly to taxpayers while using another 20 percent to pay down government debt.
“There’s even a — under consideration, a new concept where we give 20 percent of the DOGE savings to American citizens and 20 percent goes to paying down debt,” Trump said earlier this week.
Some analysts argue that these “DOGE Dividends” could contribute to inflation. However, the economic impact of this policy differs significantly from the Biden-era stimulus measures that drove inflation to four decade highs.
Asia-Pacific Markets Open Lower as U.S. Data Stokes Fears of Sticky Inflation and Slower Growth
by Amala Balakrishner
NBC, Los Angeles
Asia-Pacific markets opened lower after Wall Street logged its worst session of the year last Friday on lackluster U.S. economic data that pointed to a slowing economy and sticky inflation.
Australia’s S&P/ASX 200 extended losses to a sixth straight session, opening 0.81% lower.
In South Korea, the Kospi started the day 0.71% lower, while the small-cap Kosdaq was down 0.1.21%.
Futures for Hong Kong’s Hang Seng index last traded at 23,397, pointing to a weaker open compared to the HSI’s Friday close of 23,477.92 — it’s highest since February 2022.
Japanese markets are closed for a public holiday.
Singapore is slated to release its inflation numbers for January later in the day. A Reuters’ poll forecasts the city-state’s consumer price index reading at 2.15% year on year, higher than December’s 1.60%.
Treasury Yield Curve Flattens as 10-Year Yield Falls, Short-Term Yields Stay Put: Fed’s Pivot to Wait-and-See in Inflationary Times., but Mortgage Rates Stay Near 7%.
by Wolf Richter
Wolf Street
Long-term yields matter to the economy. So how to get the 10-year yield down? Not with rate cuts, obviously. That flopped and had the opposite effect. But with a three-pronged strategy.
The 10-year Treasury yield dropped by 8 basis points on Friday, to 4.43%, perhaps inspired by iffy feelings elsewhere as stocks careened lower and investors sought safety.
Since January 10, the 10-year yield has now given up 34 basis points of that 114-basis-point spike that it had experienced from mid-September 2024, just before the Fed’s first cut, through January 10, 2025. Over this period of surging long-term yields, the Fed had cut its short-term policy rates by 100 basis points.
Gold Revaluation Means Dollar Devaluation
by Stuart Englert
GoldSeek
Recent anomalies in the gold market, including London delivery delays, repeated record highs and unusually large bullion shipments to U.S. vaults, have precious metal analysts speculating about an official revaluation of the gold price.
If “deep storage gold” on the U.S. Treasury’s balance sheet were increased from its present $42.22 an ounce to improve the nation’s fiscal position or borrowing capacity, the move would constitute a devaluation of fiat dollars—technically Federal Reserve Notes—against gold.
Gold revaluation isn’t out of the question. It’s happened before.
It could happen again despite what Treasury Secretary Scott Bessent did or didn’t imply earlier this month by suggesting the Trump administration is “going to monetize the asset side of the U.S. balance sheet for the American people.”
Gold revaluations and dollar devaluations have occurred several times in U.S. history.