Core CPI accelerated month-to-month to 0.5% (from 0.4% in January), as "Shelter" accelerated to 0.8%. Our view is that the Fed will continue to hike rates but may slow the pace of QT, particularly as it relates to Treasuries. The Fed says it will maintain interest rate hikes as the Banking sector stumbles. More importantly, … Continue reading Price Inflation Persists. Now What?
Tag: fiscal spending
It will be difficult to keep goods and services prices in check so long as our Federal Government spends money that we don't have. If the latest pork-laden, $1.7 Trillion omnibus bill passes tonight, it will be a win for the political class and a loss for the American people. 2% CPI is not in … Continue reading Spend More. The People Shall Pay.
Price inflation is no great mystery. It's a function of Money Supply growth that is not tied to Productivity. The remedy is simple: The U.S. must spend less and produce more. Government spending was $6.8 Trillion in 2021, $4.5 Trillion of which (66% of total spending, 19% of GDP) went to Entitlements. The U.S. ran … Continue reading Inflation: Why We Have It & How To Fix It.
The CPI data category "Owners' Equivalent Rent" ("OER"), uses data derived from surveys of homeowners in select markets rather than real world data. This technique allows the BLS and the Federal Reserve to understate price inflation. OER understates CPI by 1% or more. September's 5.4% CPI increase was understated by at least 1% per our … Continue reading How The CPI’s Fuzzy Math Understates Inflation
The Fed's "Fed Funds Rate" forecast for the next several years is not realistic. Our view is that the Fed will move to raise its Fed Funds Rate more quickly than its published forecast (see page 2 of 17). The Fed anticipates median Fed Funds Rates of 0.3%, 1.0% and 1.8% in 2022, 2023 and … Continue reading Fed Funds Rate Will Increase Faster Than Fed’s Forecast
The Atlanta Fed's real GDP estimate of 3.7% is well below inflation as measured by the Fed (CPI of 5.4%) and well below any real world price inflation measure. We do not subscribe to the Fed's theory that price inflation is transitory. Our view is that price inflation will grow from here. If real GDP … Continue reading It Is Beginning To Look Like Stagflation
Federal Reserve Chairman Jerome Powell has spearheaded the most radical monetary policy in American history. From zero percent interest rates to Quantitative Easing to Corporate Security Asset Purchases to various lending facilities, to subsidizing fiscal spending programs and deficits - The Fed's resume is not one to be proud of. Under Powell the Fed has … Continue reading The Most Radical, Irresponsible Monetary Policy In U.S. History
Make no mistake, Biden's $2.3 Trillion "infrastructure" spending program and $1.8 Trillion "American Families" spending program will pass Congress. That's bad news for Americans and small business and good news for Amazon (AMZN) and Walmart (WMT). **Purchase our Amazon Kindle book "Stagflation Is Imminent": HERE First: we would not be having this conversation if the Federal … Continue reading A Tale of Two Cities
The Fed likely won't taper asset purchases this calendar year. It should, but it won't. **Purchase our Amazon Kindle book Stagflation Is Imminent: HERE We previously mentioned mid-term elections as one reason why the Fed won't take away the punch bowl. Second, the Labor Participation rate - a key economic indicator for the Fed - … Continue reading The Fed Will Not Taper In 2021. Inflation Is Not Transitory.
This year's Super Bowl in Jacksonville, FL had limited fans in attendance. The WWE (tkr: WWE) plans a return to live events in 2H 2021 per last night's earnings call. This Saturday Endeavor's UFC business unit will host approximately 15,000 fans at its in-arena event (also in Jacksonville) and plans to be in Texas for … Continue reading The Return of Live Events