Inflation

[Tim]

https://finance.yahoo.com/news/june-cpi-preview-inflation-likely-surged-to-new-40-year-high-last-month-215233961.html

This thread started in November. June 2022 8.9%
The Fed is late to the party, but the fiscal policies some say caused it. Some say no. It does not really matter. Pain is coming home.
************************ is Coming To Breakfast

https://www.youtube.com/watch?v=e63Tk-5UKPc

[uksho]

Anyone seeing a 1% increase ?

[The White Coat Investor]

Anyone seeing a 1% increase ?

According to this, the market is saying 90% for a 0.75% increase and 9% for a 1% increase.

https://www.forbes.com/advisor/inves...eting-preview/

My G fund is loving it.

[xraygoggles]

According to this, the market is saying 90% for a 0.75% increase and 9% for a 1% increase.

https://www.forbes.com/advisor/inves...eting-preview/

My G fund is loving it.

First time I've heard of this, since I don't have a TSP.

It sounds like it's a Treasury bill where the principal doesn't change, but the interest rate increases? That sounds like a win-win situation.

[uksho]

According to this, the market is saying 90% for a 0.75% increase and 9% for a 1% increase.

https://www.forbes.com/advisor/inves...eting-preview/

My G fund is loving it.

You always have something new to teach . I had to google G fund . Thanks

[Tim]

Not inflation, but the economy is starting to show a logical path.

https://finance.yahoo.com/news/tesla-apple-microsoft-peloton-all-of-tech-companies-hitting-the-brakes-on-hiring-202428628.html

[The White Coat Investor]

First time I've heard of this, since I don't have a TSP.

It sounds like it's a Treasury bill where the principal doesn't change, but the interest rate increases? That sounds like a win-win situation.

Well NOW. After 15 years of crummy returns, the G Fund is finally getting its day in the sun.

[Tangler]

Surprised inflation is not decreasing. I was a kid in 70s-80s and I was not an investor at that time so this is my first experience with inflation.

Seems it is a tough problem to fix.

Like stopping a train.

I was not surprised our fiscal policy created it, but i thought rising rates would work faster.

[Zaphod]

Surprised inflation is not decreasing. I was a kid in 70s-80s and I was not an investor at that time so this is my first experience with inflation.

Seems it is a tough problem to fix.

Like stopping a train.

I was not surprised our fiscal policy created it, but i thought rising rates would work faster.

You cant expect a 0.25% increase to do anything about a 10%+ inflation, and remember they literally just stopped QE in mid March. Laughable policy

Now the likely worst case scenario is higher probability, the predictable not enough doesnt work and then they go too big when it is already slowing. Impossible to know but now they seem on the path towards that.

[Tangler]

Dumpster Fire.

[Kamban]

You cant expect a 0.25% increase to do anything about a 10%+ inflation, and remember they literally just stopped QE in mid March. Laughable policy

Now the likely worst case scenario is higher probability, the predictable not enough doesnt work and then they go too big when it is already slowing. Impossible to know but now they seem on the path towards that.

Looks like they are going to pull out the big guns and have a 100 basis point increase. And people are worried about it depressing the housing market.

My thoughts

1. The housing market requires some brakes. People were buying houses well above asking price, paying cash, foregoing inspections etc because rates were low. This should not have been allowed to occur at all.

2. The Fed got sucked politically, waiting and watching in the sidelines while money was pumped in like crazy, especially in the latter part of the pandemic, People were flush with cash and not working and chasing fewer and fewer goods due to supply chain crisis. That was the time a chimpanzee trained in basic economics would have gently started to raise interest rates. But we had idiotic ( or scared) people sitting and waiting too long. And now they want to raise those rates with a vengeance.

3. And yet it looks like we don't learn. We want to pump in more money into further stupid programs, most of it does nothing to improve the infrastructure of this country but goes into crazy social infrastructure projects ( I never knew there was such a term until recently). And it will raise inflation further, which will require more rise in interest rates. The downward spiral......


End of rant.

[CordMcNally]

They should just honestly just build in a set interest rate hike based on the amount of money created. Sort of like sliding scale insulin. Maybe that would keep the Feds from being their own worst enemy and make our government really think about their actions.

[Tim]

They should just honestly just build in a set interest rate hike based on the amount of money created. Sort of like sliding scale insulin. Maybe that would keep the Feds from being their own worst enemy and make our government really think about their actions.

Rational logic doesn’t work with someone in panic or crazy.

[Tim]

Looks like they are going to pull out the big guns and have a 100 basis point increase. And people are worried about it depressing the housing market.

My thoughts

1. The housing market requires some brakes. People were buying houses well above asking price, paying cash, foregoing inspections etc because rates were low. This should not have been allowed to occur at all.

2. The Fed got sucked politically, waiting and watching in the sidelines while money was pumped in like crazy, especially in the latter part of the pandemic, People were flush with cash and not working and chasing fewer and fewer goods due to supply chain crisis. That was the time a chimpanzee trained in basic economics would have gently started to raise interest rates. But we had idiotic ( or scared) people sitting and waiting too long. And now they want to raise those rates with a vengeance.

3. And yet it looks like we don't learn. We want to pump in more money into further stupid programs, most of it does nothing to improve the infrastructure of this country but goes into crazy social infrastructure projects ( I never knew there was such a term until recently). And it will raise inflation further, which will require more rise in interest rates. The downward spiral......


End of rant.

Rants will get exponentially worse. Of course you know that.
Niece (nurse , not sure if NP) just left about 5 year position with a hospital. Worked directly for transplant surgeon. Overload due to loss of staff (excessive call), not the OR duties. Traveling nurse based in Denver making about $300k plus housing and expenses.
Take care of your staff if you want to keep them.

[Zaphod]

Looks like they are going to pull out the big guns and have a 100 basis point increase. And people are worried about it depressing the housing market.

My thoughts

1. The housing market requires some brakes. People were buying houses well above asking price, paying cash, foregoing inspections etc because rates were low. This should not have been allowed to occur at all.

2. The Fed got sucked politically, waiting and watching in the sidelines while money was pumped in like crazy, especially in the latter part of the pandemic, People were flush with cash and not working and chasing fewer and fewer goods due to supply chain crisis. That was the time a chimpanzee trained in basic economics would have gently started to raise interest rates. But we had idiotic ( or scared) people sitting and waiting too long. And now they want to raise those rates with a vengeance.

3. And yet it looks like we don't learn. We want to pump in more money into further stupid programs, most of it does nothing to improve the infrastructure of this country but goes into crazy social infrastructure projects ( I never knew there was such a term until recently). And it will raise inflation further, which will require more rise in interest rates. The downward spiral......


End of rant.

The fed is "independent" except when it isnt, and some admins do more or less pressuring, and certainly whether they want to or not that affects their judgement. Inflation and things looking better, etc...good unemployment, started in April 2021. A few months later there was absolutely no reason to have such extraordinary measure of QE, and housing was already looking like a bubble, they should have totally pulled out of MBS market. They didnt even need to raise rates, simply stop with the gasoline on the fire and that would have went a long way to normalizing things and likely decreased the spike.

Whole thing was dumb. Excellent retail sales out today, so if things are slowing they just that, not a hint of recession (not that it lets us know fast enough).

As for 3, Manchin is crushing anything likely to inflame things, some of that is good, like BBB I was very relieved that didnt pass, it was chock full of trash and would have been super inflationary, but he is helping to keep inflation down. Too often they get overly austere or where it makes no difference.