US Core inflation level lowest in 3 years

Disinflation coming according to Goldman Sachs chief economist.

Goldman Sachs’ chief economist says ‘The Great Disinflation’ is under way—and he expects 3 back-to-back interest rate cuts by summer


Goldman Sachs’ chief economist says ‘The Great Disinflation’ is under way—and he expects 3 back-to-back interest rate cuts by summer
Goldman’s Jan Hatzius put the odds of a recession at just 15% when much of Wall Street worried about a downturn. Now he’s taking an inflation victory lap.

Hatzius wrote Monday in a note titled “The Great Disinflation” that multiple major central banks in developed markets will make “earlier and more aggressive” interest rate cuts in 2024 as price increases fade.

In the U.S., where year-over-year inflation dropped to just 3.1% in November after hitting a four-decade high above 9% in the summer of 2022, Hatzius sees three back-to-back 25 basis point interest rate cuts in the first half of next year—probably in March, May, and June—plus two additional cuts by year-end. Then, in 2025, he expects three more rate cuts, leaving the Fed funds rate between 3.25% and 3.5% by September of that year.

 

Zerohedge. Lol

 

Sounds like promoting Desantis would be a huge mistake.

 

Article suggesting that inflation is below target and the high interest rates will crash us into a painful recession if not cut starting in January. Written by FAU professor or Econ.

Inflation Undershoots Fed Projections

After years of underestimating inflation, Federal Reserve officials now appear to be overestimating it. The personal consumption expenditures price index (PCEPI), which is the Fed’s preferred measure of the price level, declined slightly in November. It was the first month of deflation recorded since April 2020.

Prices have grown at a continuously compounding annual rate of 2.6 percent over the last year, but much of the increase occurred in the first half of the period. Inflation has averaged 2.0 percent over the last six months and just 1.4 percent over the last three months.

The FOMC changed course last week, foregoing a previously projected rate hike and projecting deeper rate cuts in 2024 than previously anticipated. But those rate cuts may come too late. The federal funds futures market is currently pricing in a 14.5 percent chance that rates will be lower following the Fed’s meeting in January. The FOMC looks unlikely to cut its target rate until March.

Given the most recent inflation data, the FOMC should probably begin cutting its target rate in January. Lower-than-anticipated inflation means that the real (i.e., inflation-adjusted) federal funds rate target is higher than FOMC members intended it to be.

 

Funny how critics of the economy has been reduced to anecdotal meme complaints. Seem like their gaslight is out of gas on the economy.


If the Fed doesnt start cutting rates soon though, they will start to see some cracks would be my guess.