Inflation remains hotter than expected, muddying path for Fed rate cuts

So...you are one to predict recessions?

 

I have and will admit that. I never feared a major depression and am glad that we have so far avoided even a minor. I am fearful that the Fed eased on the rate increases a little too early last year and that’s why we have seen some inflation increases in some of the factors over the last six months. From what I see, I think a rate decrease later this year off the table, and am fearful that we could even see another hike. I hope not, as others have pointed out here that we’re seeing more structural cracks in the business world than we saw even six months ago. The Fed was about a year too late in closing the spigot and now it looks like they’re going to have to close it more.

It will be interesting to see where corporations set their CapEx budgets for 2025.

 

I’m not predicting a recession. I can see where there is at least a possibility if not a probability of one. Recent data shows that the inflation has been much more stubborn than thought in 3Q/4Q 2023. We are by no means out of the woods yet as far as recession, and we are quite a ways away from getting interest rates down to a desired level.

 

Your previous post on this discussion was how you predicted a recession and how you still hold that view...how is that not predicting a recession?

 

If you go back and read you will see what I actually said.

 

Inflation is all supply now, in my opinion. Labor supply and housing supply primarily. Rate manipulation will do nothing in the long run to address those issues. In fact, high rates make housing worse, not better. Food and energy will sort itself out with supply and demand since there is supply easily available in shorter time periods. Labor and housing is screwed. For years.

 

2-year treasuries are very close to 5%, today. A little more bad news and we'll be back to where we were last Fall.

The 3-year note has increased from 3.97% on 12/24/23 to 4.77% as on 4/10/24, up 25 basis points from 4/6/24.

 

Dalton

 

Hill air E us.

 

Be nice, until it’s time not to be nice.

 

Looks like current inflation rate my drive an increase in expected SS increase for 2024.

New 2025 Social Security COLA Estimate Released (msn.com)

"The new prediction for 2025 is set at 3 percent due to higher-than-expected inflation numbers reported this week. Earlier in the year, analysts estimated the COLA would only be as high as 1.75 and 2.4 percent in January and February, respectively."

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"I'm just not sure that's going to be enough," Ryan told Newsweek. "Seniors are already struggling to afford basic necessities like healthcare, food, and housing. This increase may provide some relief, but I worry it still won't fully protect their purchasing power."

Seniors in particular face some of the most inflationary pressures on housing, healthcare and transportation.

According to the Bureau of Labor Statistics, while shelter costs increased by 5.7 percent year over year, hospital service prices skyrocketed by 7.5 percent. Transportation costs also had an extreme jump, at 10.7 percent."

 

That loan forgiveness is a joke. What about the person who didn't go to college but worked as a carpenter (plumber, roofer, mason, etc), then obtained his/her license and started their own business? They risked a significant amount of capital to secure the equipment to operate. They should receive some sort of "loan forgiveness, government handout" ..... not the student that borrowed $50-100K to obtain a liberal arts degree.

 

There is no need for student loan forgiveness. It's just another liberal giveaway ..... hoping to generate votes for JB and other democrats. Dems are buying votes with tax $$s.

 

I think there are better uses of money than college loan forgiving however most of the one’s that have been forgiven were need or serviced based so far. HOWEVER… the list of people getting government handouts is long and includes big oil, pharma, big agriculture, defense contractors, and the list goes on…. College grads are no lower in line than the GOP favorites.

 

If home prices were to come down that would mean we are in another great recession with too little buyers and too many homes.

Has anyone noticed that mortgage rates HAVE come down? Banks decide that, not the fed. It's in their best interest so they can do more business.

 

I don't agree with the loan forgiveness, but have YOU seen Ron duhsantis??