Posted on 03/01/2024 6:38:22 AM PST by Kaiser8408a
Well, this might keep The Fed talking heads up at night.
Over the past year or so, the Fed has been intensely discussing inflation in “core services,” which is where inflation had shifted to in 2022, from goods inflation which had spiked into mid-2022 but then cooled dramatically. So “core services” is where it’s at. Core services is where consumers spend the majority of their money. Core services are all services except energy services. Core services inflation has been behaving badly for months, and in January, it spiked out the wazoo.
The “core services” PCE price index spiked to 7.15% annualized in January from December, the worst month-to-month jump in 22 years (blue line), according to index data released today by the Bureau of Economic Analysis. Drivers of the spike were non-housing measures as well as housing inflation. More on each category in a moment.
The bad behavior of core services inflation that we have been lamenting since June – and which was confirmed earlier this month by the nasty surprise in the CPI – is why Fed governors have said this year in near unison that they’re in no hurry to cut rates, but have taken a wait-and-see approach. And now the concept of rate hikes is cropping up in their speeches again.
For example, Fed governor Michelle Bowman said in the speech yesterday, that she was “willing to raise the federal funds rate at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed.”
Even year-over-year, core services inflation has now reversed and accelerated to 3.5%.
This reversal of fortune may be big enough to lead The Fed to raise rates.
(Excerpt) Read more at confoundedinterest.net ...
Because of the trucker boycott of New York loads are costing $2000 more. This is going to have a big inflationary impact on the city.
Inquiring minds want to know which is right? As if we didn't know.
During an interview with ABC News on Thursday, White House Senior Adviser Gene Sperling stated that “people have been through a tough few years” but the PCE (Personal Consumption Expenditures) price index reading is “very close to normal” and “prices are moving in the right direction” and “moderating.” But you can’t expect them to not go up.
Misdirection. The Fed won't resume hiking rates and lowering their balance sheet until after the election.
The 4-week T-bill rate edged up very, very slightly with my recent rollover. We’re talking a couple hundredths at most.
Better than going down (for investment purposes, that is).
“core services” ?..........................
Number one question: Why is the FED touching rates in the first place. It is not their job.
it spiked out the wazoo.
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Keep aware of that WAZOO.
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