from BNN Bloomberg
Republicans Hammer Biden On Inflation, but Do They Have a Better Plan?
Opening night of the Republican National Convention programmed a central issue with a Trumpian twist: “Make America Wealthy Again.”
by Billy Binion
Reason.com
The Republican National Convention (RNC) kicked off on Monday with a song as old as time: “It’s the economy, stupid.”
That quote, which traces back to the early 1990s, came from Democratic strategist James Carville, an adviser on Bill Clinton’s first presidential campaign. But in a testament to the staying power of that message, and its resonance across political parties, it reappeared tonight in MAGA form: “Make America Wealthy Again.”
A noble goal. Can the Republican Party deliver?
It would be hard to answer that based on Monday’s program alone, which—as is typical for national political conventions—focused more on platitudes than policy prescriptions.
IMF Sees ‘Bumps’ in Path to Lower Inflation
In its latest World Economic Outlook update, the International Monetary Fund said “the momentum on global disinflation is slowing, signaling bumps along the path.”
by Hakyung Kim
NBC Washington
The International Monetary Fund warned Tuesday that upside risks to inflation have increased, calling into question the prospect of multiple Federal Reserve interest rate cuts this year.
In its latest World Economic Outlook update, the IMF said “the momentum on global disinflation is slowing, signaling bumps along the path.” The rise in sequential inflation in the U.S. earlier in 2024 has put it behind other major economies in the quantitative easing path, the report said.
The report comes as traders ramp up bets for a Fed rate cut in September. Per the CME Group’s FedWatch tool, Wall Street has priced in a 100% chance of lower rates at the Sept. 18 meeting. Traders also expect another rate decrease in November.
However, IMF chief economist Pierre-Olivier Gourinchas told CNBC’s “Squawk on the Street” on Tuesday that one rate cut from the Fed is most appropriate this year, highlighting still-stubborn services and wage inflation as complications to the path to lower inflation.
Trump Wants to “Make America Wealthy Once Again:” How Wages Have Changed; Plan’s Impact Questioned
by Sara Chernikoff, Mike Snider
USA Today
Former President Donald J. Trump wants to “make America wealthy once again.” That was the theme for day of one The Republican National Convention. Economic policies, inflation, regulation and trade deals, were the focus of Monday’s speeches, according to the GOP.
Is pay keeping up with inflation? Are Americans on a path to become wealthier? Here’s what we found:
The average hourly wages of employees rose in June compared to a year ago. The Bureau of Labor Statistics found that wages grew 3.9% between June 2023 and June 2024, quicker than the rate of inflation. Although the news is beneficial to employees, many Americans still feel the burden of rising costs of living.
Fed’s Daly Says One Or Two Rate Cuts Could Be Appropriate
With the information we have received today, which includes data on employment, inflation, GDP growth, and the outlook for the economy, I see it as likely that policy adjustments will be warranted
by Ann Saphir
Yahoo! Finance
“With the information we have received today, which includes data on employment, inflation, GDP growth, and the outlook for the economy, I see it as likely that policy adjustments, some policy adjustments, will be warranted,” Daly said in a group interview held by phone. “Exactly when that happens and when it would be appropriate to make an adjustment to policy is still unclear.”
With inflation likely to cool further, though with potentially “bumpy” progress, the economy seems to be heading “more or less” to where one or two interest rate cuts this year as projected in the June Fed policymaker forecasts “would be the appropriate path,” she said.
Powell Indicates Fed Won’t Wait Until Inflation is Down to 2% Before Cutting Rates
Powell referenced the idea that central bank policy works with “long and variable lags” to explain why the Fed wouldn’t wait for its target to be hit.
by Jesse Pound
CNBC.com
Federal Reserve Chair Jerome Powell said Monday that the central bank will not wait until inflation hits 2% to cut interest rates.
Speaking at the Economic Club of Washington D.C., Powell referenced the idea that central bank policy works with “long and variable lags” to explain why the Fed wouldn’t wait for its target to be hit.
“The implication of that is that if you wait until inflation gets all the way down to 2%, you’ve probably waited too long, because the tightening that you’re doing, or the level of tightness that you have, is still having effects which will probably drive inflation below 2%,” Powell said.
Instead, the Fed is looking for “greater confidence” that inflation will return to the 2% level, Powell said.
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.