from Garys Economics
Fed’s Powell Ready to Support Job Market, Even if it Means Lingering Inflation
by Rich Miller, Bloomberg News
BNN Bloomberg
(Bloomberg) — As inflation surged in 2022, the Federal Reserve moved to prevent a wage-hike spiral by jacking up interest rates. Now, with unemployment edging up, the central bank is signaling a willingness to cut rates to head off a job-cutting spiral – even if that means somewhat higher inflation for a while.
For the first time in the current economic upswing, Fed Chair Jerome Powell used his opening statement at Wednesday’s press conference to declare that a surprise increase in unemployment could prompt the Fed to lower rates. He then repeated that message several times in response to reporters’ questions.
While the Fed is waiting to be sure its inflation battle is won before cutting rates, “an unexpected weakening in the labor market could also warrant a policy response,” he said after its two-day policy meeting.
Summers: ‘Green Investments’ and Inflation Reduction Act Will Put Upward Pressure On Interest Rates
by Ian Hanchett
Breitbart.com
During an interview aired on Friday’s edition of Bloomberg’s “Wall Street Week,” Harvard Professor, economist, Director of the National Economic Council under President Barack Obama, and Treasury Secretary under President Bill Clinton Larry Summers stated that the “huge set of new private sector investments going on with respect to green investments and the IRA” will put upward pressure on interest rates.
Summers said that he finds the Federal Reserve’s belief “that the ultimate neutral rate is 2.6 to be bizarre in current circumstances. Here’s what we have relative to a few years ago, when they said it was 2.5: We’ve got fiscal policy in a much, much more expansionary place with much higher deficits, much larger role of debt.
Gold Remains the Best Long Term Hedge Against Inflation
by Dave Kranzler
Investment Research Dynamics
This chart is from John Williams’ Shadow Government Statistics newsletter.
It shows the price of gold, CPI and predecessor measures and Shadow Stats alternative CPI (John removes the statistical gimmicks used by the BLS to mute inflation) from 1665 to present:
The Best Long-Term Hedge against Inflation Remains Holding Your Liquid Assets in Physical Gold and Silver
ShadowStats Ultimate Gold vs. Inflation Graphs
Biden Economy: Record Number of Americans Using ‘Buy Now, Pay Later’ Apps
by Paul Bois
Breitbart.com
A record number of Americans have been using “buy now, pay later” apps amid the surging inflation seen in Biden’s economy.
A new report from PYMNTS Intelligence showed 6.5 percent of Americans, roughly 15 million, have been using BPNL apps to pay for groceries since last year. Per the New York Post:
Of those using the apps — offered by fintech services such as Affirm, Klarna, Afterpay and PayPal — around 5.4% were low-income Americans, according to the study.
The rest were those whose yearly incomes were at least $100,000.
Last month, the Federal Reserve Bank of New York published research which found that people with a credit score under 620 were nearly three times as likely as financially stable consumers to use BNPL five or more times last year.
BPNL loans are short-term loans with fixed payments at little to no interest. They have also been called “point-of-sale installment loans.”
Price Inflation Accelerates for Second Month as Biden Blames “Greed”
from Zero Hedge
According to the Bureau of Labor Statistics’ latest price inflation data, CPI inflation in February accelerated for the second month in a row, and price inflation hasn’t proven nearly as transitory as the regime’s economists have long predicted.
According to the BLS, Consumer Price Index (CPI) inflation rose 3.2 percent year over year during February, without seasonal adjustment. That’s the thirty-sixth month in a row of inflation well above the Fed’s arbitrary 2 percent inflation target.
Recent Higher Inflation Numbers Haven’t ‘Really Changed the Overall Story’
by Megan Leonhardt
Barron’s
Inflation has been running hotter recently, with the first two months of data for this year showing little progress in bringing price growth back to the Federal Reserve’s 2% target.
Fed Chair Jerome Powell said Wednesday that the January and February consumer price index and the January personal consumption expenditures price index were “quite high, but there’s reason to think that, at least for the first month of the year, that “seasonal effects” were at play.
“We don’t want to be completely dismissive of it,” Powell said. “I always try to be careful about dismissing data that we don’t like—so you need to check yourself on that.”
Hollywood’s Streaming Business On the Brink as Price Hikes Push More Americans Away
by Alana Mastrangelo
Breitbart.com
Hollywood’s streaming business is on the brink of catastrophe while price hikes continue to push more American subscribers away.
Streaming video services are facing a number of problems, including high costs, high churn rates, and competition from other platforms. Meanwhile, a slew of U.S. customers are wondering if paying for their subscriptions is even worth it, Variety reported.
The average U.S. household pays a total of $61 per month for four streaming video entertainment services — which is up 27 percent from $48 per month last year — according to an annual study by Deloitte.
The study suggests that price hikes could be near their breaking point, as just over one-third of survey respondents (36 percent) said the content found on streaming video services is not worth the price.
Turks Pile Into the Dollar, Gold and Stocks as 67% Inflation Savages ‘Worthless Lira’
by Scott McLean, Ipek Yezdani and Anna Cooban
CNN
Istanbul/London CNN – Down a dimly lit alleyway tucked just inside Istanbul’s Grand Bazaar, a few dozen men are packed together, shouting, waving, and frantically speaking on their phones, others nervously pacing.
This “standing market” — a low-rent version of a chaotic stock exchange floor — is where Istanbul’s traders come to deal in precious metals and currencies. These days it’s dollars and gold they’re after. Turkish lira, not so much.
“Right now our money is almost worthless. Since people haven’t seen inflation fall, they don’t trust the Turkish lira anymore,” explained Adnan Kapukaya, a trader and market expert.
Price Inflation Accelerates for Second Month as Biden Blames “Greed”
by Ryan McMaken
Mises.org
According to the Bureau of Labor Statistics’ latest price inflation data, CPI inflation in February accelerated for the second month in a row, and price inflation hasn’t proven nearly as transitory as the regime’s economists have long predicted.
According to the BLS, Consumer Price Index (CPI) inflation rose 3.2 percent year over year during February, without seasonal adjustment. That’s the thirty-sixth month in a row of inflation well above the Fed’s arbitrary 2 percent inflation target.
Month-over-month inflation accelerated, with the CPI rising 0.4 percent from January to February, with seasonal adjustment. Month-to-month growth had been 0.3 percent from December to January.
There Goes the Fed’s Inflation Target: Goldman Sees Terminal Rate 100bps Higher at 3.5%
from Zero Hedge
Two years ago, we first said that it’s only a matter of time before the Fed admits it is unable to rsolve the so-called “last mile” of inflation and that as a result, the old inflation target of 2% is no longer viable.
At some point Fed will concede it has no control over supply. That’s when we will start getting leaks of raising the inflation target
— zerohedge (@zerohedge) June 21, 2022
Then one year ago, we correctly said that while everyone was paying attention elsewhere, the inflation target had already been hiked to 2.8%… on the way to even more increases.