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Treasuries Rally as Cool Inflation Boosts Bets On Three Fed Cuts

by Liz Capo McCormick and Ye Xie
Yahoo! Finance

(Bloomberg) — Treasury yields tumbled after benign inflation data renewed confidence that the Federal Reserve will cut interest rates at least twice this year.

Most rates slid to their lowest since March, with those on two-year debt — more sensitive than longer maturities to changes in the Fed’s policy outlook — sinking as much as 13 basis points to 4.486%. Economists at JPMorgan Chase & Co. responded by pulling forward their forecast for the start of Fed easing to September from November, and traders fully priced in a September cut for the first time in months.

The odds of a September rate cut jumped from around 70% before the data. For all of 2024, the contracts imply 60 basis points easing — at least two quarter-point moves — from about 49 basis points earlier.

“The data makes a September cut a slam dunk now,” said Andrew Brenner, head of international fixed income at NatAlliance Securities LLC. “You are going to get three cuts this year — September, November and December — and the market is starting to price that.”

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Wheel of (Shrinking) Fortune: How Game-Show Prizes Have Lagged Behind Inflation

by Kelly Lawler
USA Today

These days it’s more like who wants to be a multimillionaire, am I right?

Times have changed ever since game shows and reality competition series like “Who Wants to Be a Millionaire” and “Survivor” started doling out $1 million prizes to winners more than two decades ago. But the series still offer the same seven-figure prize, even though a million bucks just ain’t what it used to be.

Inflation and massive cost-of-living increases in the United States have been dramatic, and these series simply haven’t kept up. So that million-dollar question that Regis Philbin asked contestants back in 1999 paid a lot more than the one Jimmy Kimmel asks celebrities in the latest prime-time incarnation of “Millionaire” this summer (Wednesdays, 8 EDT/PDT).

Continue Reading at USAToday.com…

Voters Trust GOP More to Deal With America’s ‘Very Serious’ Inflation Problem

by John Carney
Breitbart.com

Republicans are far more trusted than Democrats to handle America’s inflation problem, polling from Rasmussen Reports indicates.

Fifty-three percent of likely voters trust Republicans more to handle inflation, according to a survey of 1,17 U.S. likely voters conducted on June 30-July 2, 2024 showed.

Just 37 percent of likely voters say Democrats are better on the issue, giving Republicans a 16-point advantage on inflation.

This is likely to influence the upcoming U.S. elections. Eighty-four percent believe the issue of inflation will be important in this year’s presidential election. Sixty-one percent say it is likely to be very important.

Continue Reading at Breitbart.com…

Gen Z Consumers in the U.S. Rely On Parents as Inflation Squeezes Budgets, Study Shows

by Makailah Gause
Yahoo! Finance

(Reuters) – Gen Z adults in the U.S. face increasing financial challenges because of inflation and rising living costs, with 46% relying on financial assistance from their parents and families, according to a report by Bank of America published on Wednesday.

Half of the 1,091 people aged 18 to 27 surveyed by the bank were not on track to buy a home in the next five years. Respondents were polled in April and May, with the survey weighted to meet national population benchmarks, including gender and race.

The survey showed 46% of young people were unprepared to save for retirement and 40% were not ready to start investing in the next five years.

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California’s Minimum Wage Law Has Led Some Employers to Cut Hours and Hike Prices

“I’ve been in the business for 25 years…I never had to increase the amount of pricing that I did this past time in April,” one business owner told the A.P.

by Emma Camp
Reason.com

Last September, California Governor Gavin Newsom (D) signed a bill mandating a $20 minimum wage for fast food workers. The new wage is among the highest in the county, surpassing even Washington, D.C.’s $17.50 minimum wage. While supporters touted the wage increase as a way to help struggling Californians, detractors warned that restaurant owners would respond by laying off workers, cutting their hours, or speeding up the already starting shift to automation.

The law went into effect in April, meaning that it’s likely too early to tell what the ultimate effects of the law will be. However, a recent report from the Associated Press detailed concerns from several California fast food restaurant owners who say they’ve been forced to reduce hours and hike food prices.

Continue Reading at Reason.com…

Markets Waiting On CPI

by Ira Epstein
GoldSeek

When you look at the gold market, again the market has been sitting in very much sideways action. This is a weekly chart of just closes and you can see how the market’s done that when we look at a daily borrow chart, pointed out that you would come up before to this resistance point.

And if you come back with me here, you can see how the market just came down and held itself, bouncing back and forth. The bias of the market is going to be up and the trend is up. Why? Well, the trend is on the swing line, higher lows, and higher highs. I already know it’s holding the 18-day average of closes. I mentioned that the battleground’s probably around the $2347 level and it is on the upside, it’ll be the upper Bollinger Band around the $2389 level in terms of momentum, you have worked off in overbought condition. So the market’s getting itself ready for CPI, and PPI events.

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Could the Price of Gold Really Hit $48,000? Plus Expect Hairy 1970s-Style Inflation

from King World News

Could the price of gold really hit $48,000? Plus expect more hairy 1970s-style inflation.

Fed Warns They Will Continue To Shrink Balance Sheet

July 10 (King World News) – Peter Boockvar: Early on today and unlike yesterday, Jay Powell was asked about the Fed’s balance sheet and he said they have a “good ways to go” in shrinking it “and going slower will allow us to go further.” The balance sheet currently stands at about $7.2 trillion, down from almost $9 trillion but still up from around $4 trillion before Covid.

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An Inflation Election Will Favor Republicans

by John Carney
Breitbart.com

It’s Still the Economy, Stupid

The latest polling indicates that Republicans are well-positioned to take advantage of voter unhappiness about inflation and the U.S. economy—and that these issues may be decisive in November.

But Republicans should not get complacent. Democrats are actually gaining a bit.

According to our friends at Rasmussen Reports, 91 percent of likely voters say economic issues will be important in this year’s presidential election. Sixty-eight percent say the economy will be very important.

Republicans are heavily favored by those who say the economy will be very important. Fifty-nine percent of likely voters who see the economy as very important in this year’s election say they trust the Republicans more, versus 32 percent who say they trust the Democrats.

Continue Reading at Breitbart.com…

High Inflation is No Longer Only Risk for U.S. Economy: Fed Chair Powell

by Courtenay Brown
Axios

Federal Reserve chair Jerome Powell told lawmakers on Tuesday that a weakening labor market is just as much a risk to the economy as high inflation.

Why it matters: In recent months, Fed officials have said they want to see more economic data that confirms inflation is receding before lowering interest rates. But Powell acknowledges that waiting too long to do so could unnecessarily harm the economy and job market.

What they’re saying: “[I]n light of the progress made both in lowering inflation and in cooling the labor market over the past two years, elevated inflation is not the only risk we face,” Powell told the Senate Banking Committee hearing.

Continue Reading at Axios.com…

Inflation Lessons Unlearned

A new White House proposal won’t help lower Americans’ grocery bills.

by Allison Schrager
City Journal

When I was a graduate student in economics and learned about the inflation of the 1970s, I marveled at how poorly policymakers understood the problem. The price controls they enacted that decade failed miserably, leading to shortages and other market disruptions. I assumed, as a result, that we’d never hear the words “price gouging” again.

I was wrong. Last week, President Joe Biden released a plan to bring down food prices that repeats these past mistakes. The president proposes “calling on” grocery chains to lower prices, partnering with state attorneys general to “take on price gouging,” and boosting food benefits to low-income people by $2,000 annually.

It’s all bad economics. Our recent bout of inflation was caused initially by a combination of pandemic-driven supply constraints and elevated demand from federal transfer payments—not corporate greed or price gouging.

Continue Reading at City-Journal.org…