from misesmedia
Breitbart Business Digest: Inflation’s Surge Dims Biden Election Hopes
by John Carney
Breitbart.com
Inflation Also Rises
When we warned yesterday that there were still upside risks to inflation despite two months of weaker than expected reports, we did not expect to see our view confirmed the very next day.
Yet that’s exactly what happened in today’s producer price index (PPI) report from the Bureau of Labor Statistics. The index for final demand jumped by 0.2 percent in June, twice what was expected. In addition, there were significant upward revisions to the previous month’s PPI, moving the headline final demand up from a 0.2 percent decline to a flat reading.
The year-over-year PPI gain for PPI rose to 2.6 percent, the highest 12-month increase since March 2023. The index has now been rising for five consecutive months, calling into question the idea that inflation is on a path to two percent.
Inflation Data Sparks Rush for Gold, Real Estate, Treasuries, Yen: Traders See September Rate Cut as Done Deal
CPI inflation rate falls from 3.3% in May to 3% in June, the lowest since April 2021, missing the 3.1% estimate.
by Piero Cingari
Benzinga.com
The stars seem to be aligned for a reduction in U.S. interest rates in about two months, as the June inflation report released Thursday may provide policymakers with the confidence that annual consumer price changes are finally trending toward the Fed’s 2% target.
The inflation rate fell from 3.3% in May 2024 to 3% year-over-year in June 2024, the lowest since April 2021, according to the Bureau of Labor Statistics. The outcome fell short of the estimated 3.1%. On a month-over-month basis, the consumer basket contracted by 0.1%, marking the first negative reading since May 2020.
The data sparked a surge in rate cut bets, triggering a rally in interest-rate-sensitive assets.
Welcome to Inflationary Depression
by Jeffrey Tucker
Daily Reckoning
There was an oblique message buried in a recent New York Times story on the growing crisis in commercial real estate in cities.
Yes, this is exactly the kind of article that people pass over because it seems like it doesn’t have broad application. In fact, it does.
It affects the core of issues like our city skylines, how we think about urbanism and progress, where we vacation and work and whether the big cities are drivers or drains on national productivity.
The note mentions the “broader distress brewing in the commercial real estate market, which is hurting from the twin punches of high interest rates, which make it harder to refinance loans, and low occupancy rates for office buildings — an outcome of the pandemic.”
Consumer Prices Decline in June
by Alexander William Salter
The American Institute for Economic Research
The Federal Reserve is trying to engineer a gradual disinflation. It is getting outright deflation. The Bureau of Labor Statistics reported that the Consumer Price Index (CPI) decreased 0.1 percent in June. Consumer prices have grown 3.0 percent over the last year, which is the lowest 12-month rate since March 2021.
Core CPI, which excludes volatile food and energy prices, increased 0.1 percent. Year-over-year core inflation was 3.3 percent, the lowest since April 2021.
[…] Headline price decreases, driven by monetary tightening, are not necessary to get us back to the Fed’s target 2 percent growth path, but they do facilitate a quicker return. We may have reached a definitive point in policymakers’ (self-imposed) struggle against excessive dollar depreciation.
What is Happening with Gold and the U.S. Dollar is Absolutely Stunning
from King World News
On the heels of the failed assassination attempt on former President Donald Trump, what is happening with gold and the US dollar is absolutely stunning.
July 14 (King World News) – Matthew Piepenburg, partner at VON GREYERZ AG: Between politics (driven by self rather than public servants), markets (driven by debt rather than profits) and currencies (diluted by over-creation rather than chaperoned by a real asset), it is fair to say we live in not interesting but surreal times.
But amidst the surreal, the dollar, as many believe, is our rock, our immortal albeit often unloved constant.
Three Real Assets Primed for Growth in the Coming Inflation Bonanza
by James Hickman
Schiff Sovereign
Today’s inflation report showing ‘only’ 3% inflation, the Federal Reserve is all but guaranteed to start slashing interest rates.
The Fed Chairman essentially promised as much to Congress earlier this week, and has warned that if they don’t start cutting interest rates soon, “we could undermine the [economic] recovery.”
These guys still don’t get it. At this point it’s not even about 3% inflation (which is still too high) or 2% inflation. It’s about prices going back down to pre-pandemic levels… or just lower in general.
But that’s just never going to happen. The Fed doesn’t care about price reductions; they’re happy with a slower rate of price increases… which is totally out of touch with what people want and need.
Consumers Finally Get Some Relief From Inflation as Prices Decline for First Month Since 2020
by John Carney
Breitbart.com
Consumers got the first break from inflation since the height of the pandemic in 2020.
In a surprising turn of events, the cost of consumer goods and services dropped in June, the Department of Labor said Thursday.
This significant decline signals a recent slowdown in inflation, raising hopes that the Federal Reserve might slash high U.S. interest rates in the coming months.
The consumer price index (CPI) dipped by 0.1 percent in June following a flat performance in May. This marks the first decrease since May 2020, when the pandemic’s grip forced the economy into an unprecedented shutdown.
Here’s the Inflation Breakdown for June 2024 – In One Chart
The consumer price index rose 3% in June 2024 from a year earlier, a decline from 3.3% in May, according to the U.S. Bureau of Labor Statistics.
by Greg Iacurci
CNBC.com
Inflation fell further in June as lower gasoline prices combined with other easing price pressures to bring relief for consumers’ wallets.
The consumer price index, a key inflation gauge, rose 3% in June from a year ago, down from 3.3% in May, the U.S. Department of Labor reported Thursday.
The CPI gauges how fast prices are changing across the U.S. economy. It measures everything from fruits and vegetables to haircuts, concert tickets and household appliances.
Beneath the Skin of CPI Inflation: Historic Plunge in Durable Goods Prices, Plunge in Gasoline, and Outliers in Services
by Wolf Richter
Wolf Street
Core Services CPI produced 2nd outlier. In the past, after two outliers in this very volatile data, the next move was a U-turn.
The Consumer Price Index for June, on a month-to-month basis, was pushed down by plunging gasoline prices, the continued historic plunge in prices of durable goods, led by used vehicles, nearly-flat food-at-home prices, and “core services” prices that rose at the smallest pace since the summer of 2021 in what looks like an outlier move of which we have seen already many in both directions.
Treasuries Rally as Cool Inflation Boosts Bets On Three Fed Cuts
by Liz Capo McCormick and Ye Xie
Yahoo! Finance
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.”