Jump to content
House Price Crash Forum
Sign in to follow this  
FrozenOut

Us Inflation Up

Recommended Posts

Yikes! 0.9% Thats a monster monthly increase in headline rate (half the "comfort zone" annual core rate)

But market seems not spooked http://today.reuters.com/investing/finance...RKETS-BONDS.XML

But if they were factoring in a 0.25% rise next month this is hardly going to change that liklihood.

People (professional financiers!) seem to focus on and take comfort from the flat core (0.2%) cpi figure.

Volcker must be wondering whether people have forgotton what he had to do and did. I read about the mistakes made in the US and here in the 70s when people stripped out energy and all sorts of other "volatile" things from the cpi data - it all caught up with them. Are we heading for the same territory?

Then people eventually realised oil prices had readjusted permanently. Clearly that is not the consensus view this time round (so far...)

Share this post


Link to post
Share on other sites

" Excluding food and energy prices, however, the core PCE price index rose a more moderate 0.2%."

Food and energy prices, the one things we can't stop buying, or take time to control.

Now if I can just get my kids to stop eating.

Share this post


Link to post
Share on other sites

" Excluding food and energy prices, however, the core PCE price index rose a more moderate 0.2%."

Food and energy prices, the one things we can't stop buying, or take time to control.

Now if I can just get my kids to stop eating.

Hmmm... To do list.... must remember to buy shares in stomach stapling equipment firms :)

Share this post


Link to post
Share on other sites

I hope they're not planning to inflate out of trouble. Nah, oh way, up she rises, oh way, up she rises...

I think the real problem that any western government will face if they try and inflate their way out of trouble this time around is that it would only make their workforces even less competitive compared to the 50p/hour labourers in the far east.

Share this post


Link to post
Share on other sites
Guest Guy_Montag

I'm concerned that they will keep excluding things until we end up with something like:

"UPI (Underpant Purchasing Index, which is RPI excluding: Food, fuel, rent, mortgauge repayments, council tax, tools, cars, alcoholic & non-alcoholic drinks, tobbacco, clothes (excluding underpants), holidays, shoes) fell by 0.1% last month so we can drop interest rates.

The old standards of RPI & CPI rose from 12.5% to 14% and 12.3% to 13% respectively, however, the chancellor argued that the only important measure was UPI & put a pair underpants on his head & stuck two pencils up his nose..."

Share this post


Link to post
Share on other sites

I'm concerned that they will keep excluding things until we end up with something like:

"UPI (Underpant Purchasing Index, which is RPI excluding: Food, fuel, rent, mortgauge repayments, council tax, tools, cars, alcoholic & non-alcoholic drinks, tobbacco, clothes (excluding underpants), holidays, shoes) fell by 0.1% last month so we can drop interest rates.

The old standards of RPI & CPI rose from 12.5% to 14% and 12.3% to 13% respectively, however, the chancellor argued that the only important measure was UPI & put a pair underpants on his head & stuck two pencils up his nose..."

:lol::lol::lol::lol::lol:

Surely they won't use underpants because we all need them.

Share this post


Link to post
Share on other sites

Time to chop up the decking which will come in handy as fire wood and convert the freed up space to a nice vegetable patch. Have you tried growing your own? Marvellous, tastes much better than that GM crap one buys down at the local supermarket these days...

You can grow veggies in November? The frost just killed my garden.

Share this post


Link to post
Share on other sites

I'm concerned that they will keep excluding things until we end up with something like:

"UPI (Underpant Purchasing Index, which is RPI excluding: Food, fuel, rent, mortgauge repayments, council tax, tools, cars, alcoholic & non-alcoholic drinks, tobbacco, clothes (excluding underpants), holidays, shoes) fell by 0.1% last month so we can drop interest rates.

The old standards of RPI & CPI rose from 12.5% to 14% and 12.3% to 13% respectively, however, the chancellor argued that the only important measure was UPI & put a pair underpants on his head & stuck two pencils up his nose..."

very funny :):) but good point

Share this post


Link to post
Share on other sites

I know we have done this on other threads but I cannot recall a conclusive answer:

Headline US cpi rose 0.9% in September - the highest since 1981. (An annualised 10.8%)

Core cpi excluding food and energy rose 0.2%. This is the Fed's "preferred" measure.

Also, personal incomes rose 6.3% (wages by 6% yoy!) - see: http://www.bloomberg.com/apps/news?pid=100...J6GEC0&refer=us

OK, so there is some damage after the hurricanes (clearly temporary) and oil prices are still on the high side - but "things" (or "stuff" as the yanks might say) are still costing the US consumer more of his income each month - which is starting to hit growth. That is continuing and does not look like going away in the short term (particuarly on oil/gas front). Incomes are on the way up at the same time. I am an amateur but this looks suspciously like what my old dad called stagflation.

How long can this continue. When does this "volatility" cease to be temporary and at what level of headline cpi does the Fed (and the market) sit up and take notice (and take action)? Or is that what the gradual tightening is trying to do? If so, is it enough? eg if oil is still c $60 a barrel in a year's time the "core" cpi would have stripped out of the data a year's worth of higher oil and gasoline prices paid for by the US consumer. Do we just forget about that!?

Clearly, one could make the same broad points about the UK and MPC.

Edited by Tempest

Share this post


Link to post
Share on other sites

Tempest, energy prices are going to kill the American counsmer. I mean, okay, we drive big old honken SUVs etc, but that is not the budget killer, heat for our homes will.

I find it interesting that October brought higher energy prices, a doublng of credit card payments, and a new BK law. Should be an interesting winter.

Share this post


Link to post
Share on other sites

Tempest, energy prices are going to kill the American counsmer. I mean, okay, we drive big old honken SUVs etc, but that is not the budget killer, heat for our homes will.

I find it interesting that October brought higher energy prices, a doublng of credit card payments, and a new BK law. Should be an interesting winter.

Why not come to UK then. Everything's going to be fine here. Gordon Brown told me ......

Share this post


Link to post
Share on other sites

Ok, so everyone expects US Interest Rates to raise 0.25points tomorrow (to 4%), but with this jump in inflation does anyone think they will be raised more than this?

Share this post


Link to post
Share on other sites

You can grow veggies in November? The frost just killed my garden.

In the UK "veggie" means person who is vegetarian.....

The slang word for vegetable is "veg".

You learn something every day!

frugalista

Share this post


Link to post
Share on other sites

In the UK "veggie" means person who is vegetarian.....

The slang word for vegetable is "veg".

You learn something every day!

frugalista

LOL Thanks.

Share this post


Link to post
Share on other sites

It is disingenuous of goverments to try and strip out the cost of energy in this way.

The cost of energy is built into every manaufactured product and service sold.

Sooner or later the bigcorps will pass thisonto the consumer, or go bust.

ABB

Share this post


Link to post
Share on other sites

Ok, so everyone expects US Interest Rates to raise 0.25points tomorrow (to 4%), but with this jump in inflation does anyone think they will be raised more than this?

If they did it would wrong foot the markets.However,I would not be suprised to hear a bearish statement and then a softening up for quicker rises.

Share this post


Link to post
Share on other sites

When does the new fella make his first IR decision?

Will he want to make a statement of some kind to the markets?

Yes, he will want to make the statement "nothing to see here, business as usual, steady hand on the tiller etc." and raise rates by .25%.

Interestingly, I learned on NPR the other day that unlike the Bank of England, the Federal Reserve does not have an explicit inflation target. I also learned however, that Ben Benanke is a strict monetarist and thinks such an inflation target would be an excellent idea.

frugalista

Share this post


Link to post
Share on other sites

When does the new fella make his first IR decision?

Will he want to make a statement of some kind to the markets?

I don't believe he even takes over until Jan sometime.

Share this post


Link to post
Share on other sites

When does the new fella make his first IR decision?

Will he want to make a statement of some kind to the markets?

Alan Greenspan leaves the job at the end of January, and I believe some special arrangements have been made to bring the next-but-2 meeting forward so he will chair, rather than Ben Bernanke (assuming he gets ratified) having to chair a meeting on his first day.

So the first meeting chaired by Dr Bernanke should be in the middle of March, seeing as they are held every 6 weeks.

And it should be noted that in theory the chairman only has one vote out of 9. In practice, of course, he has more power than that, but not enough to force through an IR decision by himself.

(Any Americans please feel free to correct any errors here. :) )

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.