from ET NOW
Fed Holds Rates Steady but Sends Mixed Signals About Timing of a Cut Later This Year
by John Carney
Breitbart.com
Federal Reserve officials agreed to hold interest rates steady at a 22-year high and signaled they may cut rates this year if inflation continues to show signs of declining to their two percent target.
Officials held the central bank’s benchmark federal funds rate unchanged Wednesday at a range between 5.25 percent and 5.5 percent, the level it reached last July after 10 consecutive hikes, following a run of mixed economic data that revealed moderating price pressures and a cooling of the labor market even while the economy continues to grow quickly.
The Fed’s statement indicates that it remains patient on rate cuts and is still looking for more data to build confidence that inflation is moving toward its target. This may throw some cold water on investors’ expectations of a September cut.
The Fed Holds the Target Interest Rate Steady. This Won’t Last Much Longer.
by Ryan McMaken
Mises.org
The Federal Reserve’s Federal Open Market Committee (FOMC) announced today that it will maintain the current target policy interest rate (the federal funds rate) of 5.5 percent. The committee has now held the rate at this level since the end of July 2023.
According to the FOMC’s press release:
The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities.
After such a long period holding rates flat, it would be unprecedented for the Fed to begin a new cycle of rising rates. Given this, and given that economic indicators continue to weaken, we can be quite confident that once the FOMC feels it is politically advantageous to do so, it will force down rates even lower.
Kamala Harris Was the Biggest Cheerleader for Bidenomics
by John Carney
Breitbart.com
Biden’s Economy Is Likely to Weigh on Kamala Harris
Kamala Harris has entered the presidential race burdened by her deep ties to the widely disliked Biden economy.
The latest Harvard CAPS/Harris poll has Harris behind Donald Trump by three points. While that is narrower than the seven point lead Trump had over Joe Biden, it is hardly the explosion of popularity you might expect from the ebullient reaction from Democratic partisans and their allies in the establishment media.
Keep in mind that Republicans have lost the popular vote in all but one election since 2000. So, Harris being just behind Trump 100 days before the election means Trump is in a strong position.
What, and Who, Caused the Inflation the Fed is Currently Fighting?
by Richard Mills
GoldSeek
The weaker labor market and rising unemployment rate, which hit 4.1% in June, is fodder for the US Federal Reserve to slash interest rates, possibly once in September and a second time in December.
In remarks to Congress, Fed Chair Jerome Powell said the US is “no longer an overheated economy” with a job market that has “cooled considerably” and is back where it was before the pandemic, suggesting the potential for rate cuts is becoming stronger. (Reuters, July 9, 2024)
Powell told senators that inflation has been improving in recent months. The chart below shows the annual inflation rate slowed to 3.0% in June, compared to 3.3% in May and 3.4% in April.
Shoplifters Point to Inflation and Economy as Main Reasons for Stealing From Retailers
by Khristopher J. Brooks
CBS News
Inflation has led to price surges at grocery stores, car dealerships and even dine-in restaurants nationwide. A new study finds it’s also the main motive behind another recent surge: shoplifting.
More than 20% of Americans have admitted to stealing items from stores within the past year or so, according to a new survey from personal finance website LendingTree, which polled 2,000 U.S. consumers from ages 18 to 78.
Of those who admitted to recent retail theft, roughly 90% of them said they did so because of inflation and the current economy. Specific reasons included, prices becoming otherwise unaffordable (34%), helping make ends meet (30%) and helping save a few bucks (27%).
Fed’s Preferred Inflation Gauge Cools, Adding to Likelihood of a September Rate Cut
The Federal Reserve’s favored inflation measure remained low last month, bolstering evidence that price pressures are steadily cooling and setting the stage for the Fed to begin cutting interest rates in September
by Christopher Rugaber
ABC News
WASHINGTON — The Federal Reserve’s favored inflation measure remained low last month, bolstering evidence that price pressures are steadily cooling and setting the stage for the Fed to begin cutting interest rates in September.
Prices rose just 0.1% from May to June, the Commerce Department said Friday, up from the previous month’s unchanged reading. Compared with a year earlier, inflation declined to 2.5% from 2.6%.
Excluding volatile food and energy prices, so-called core inflation rose 0.2% from May to June, up from the previous month’s 0.1%. Measured from one year earlier, core prices increased 2.6%, unchanged from June. Economists closely watch core prices, which typically provide a better read of future inflation trends.
Inflation Rankings Flip: Northeast Has Largest Price Jumps, South and West Cool Off
by Paul Davidson
USA Today
The nation’s regional inflation rankings have turned upside down.
For years, inflation has been higher in the South and West because Americans flocked to those areas for their temperate climates and lower costs, driving strong consumer demand and higher prices.
That trend was amplified by the pandemic. As remote work spread, many people streamed out of densely populated Northeastern and Midwestern cities like New York and Chicago for less costly areas with lots of open spaces, like Tennessee’s Nashville and Idaho’s Boise.
But the pecking order has reshuffled.
Consumers’ Mixed Economic Sentiments Hurt by Inflation, Lifted by Labor
from PYMNTS
As consumers look at their economic prospects, they are torn between factors pulling them in different directions, feeling relatively confident about the job market but remaining deeply concerned about rising prices.
Confidence Ekes Upward
The Conference Board Consumer Confidence Index rose modestly in July, signaling mixed sentiments among U.S. consumers. The index increased to 100.3 from a revised 97.8 in June. This uptick, however, masks underlying concerns. The Present Situation Index, which evaluates current business and labor market conditions, dropped to 133.6 from 135.3, indicating that consumers perceive the present economic situation as slightly deteriorating.
A Former Fed Official Finally Tells the Truth About Inflation…
by James Hickman
Schiff Sovereign
My sister used to be a reporter for Fox News based in south Florida and would regularly be assigned to cover NASA press conferences.
And she’s often told me about how reporters were terrified to ask any real questions. They’re not astrophysicists and don’t understand the first thing about rocket propulsion, and most of the journalists never bothered to learn even the basics of the topic.
So, the majority of the questions were very superficial; quite simply the reporters didn’t want to embarrass themselves.
This is how the media covers the Federal Reserve. Most reporters don’t have a clue about central banking, so, not wanting to look stupid, they just sit quietly and give the Fed a pass. There’s no real scrutiny.
Kamala Harris Insisted “Bidenomics’ Worked While Costs Soared
by Wendell Husebo
Breitbart.com
Vice President Kamala Harris championed the administration’s so-called “Bidenomics” as costs dramatically soared for American families.
Costs increased on average across the board by about 20 percent under the Biden-Harris administration. Popeyes, Taco Bell, and Chipotle, for example, raised prices by at least 75 percent, according to the Food Institute.
At least five times Harris praised the policies that fueled the rising costs:
- July 24, 2023: “Bidenomics is working”
- August 3, 2023: “Bidenomics is working”
- August 4, 2023: “Bidenomics is working”
- August 8, 2023: “Bidenomics is working”
- August 15, 2023: “Bidenomics is working”
Harris will have a difficult time convincing voters to believe that the administration is doing a good job on the economy, the number one issue for voters.