PCE Increases Modestly in June

The Feds go to index ticked up slightly in June:

Fed's go-to inflation gauge confirms mild price increases in June (axios.com)

The PCE edged up .1% while the core PCE, minus food and energy, went up .2%. It's going the wrong way for the Fed to cut interest rates in September.

The Federal Reserve's preferred inflation index showed prices increased at a moderate pace last month.

By the numbers: The personal consumption expenditures index—the inflation gauge watched most closely by Fed officials—rose 0.1% in June after a flat reading the prior month, the Commerce Department said on Friday.

• Excluding food and energy, the core measure rose 0.2%, a tick faster than in May.
• From the same month a year ago, PCE rose 2.5% in June compared to May's 2.6%. Core PCE held at 2.6%.

 

Suggest you point that out to Axios as you are evidently smarter than they are.....

 

Opinions are like assholes. That's why I presented just the facts.

The Fed raised rates 7 times as Trump's CPI hit 2.4%. To lower rates at this point would be blatantly political as the last CPI was 3.0%. Even the 3.0% had the 1,000,000 gallons of gasoline released into the summer driving market that lowered inflation more than it would have been without the release. I think the bang for that release has already been used up.

There won't be a rate cut in September without significant infighting among the Fed Reserve Governors. However, it really doesn't matter. The inflation increases even though less are on top of the high Bidenflation that peaked at much higher levels before coming down slowly to get back into the ballpark with the Feds 2.0% target. This is why the people will vote against the democrats. They see inflation from the time Biden entered office. They know their lives have been worse off under Biden.

Lowering rates in this healthy economy will only lead to higher inflation again and quickly. I don't see the Feds lowering now that the end is in sight and accompanied by a soft landing the Feds engineered. The US is likely close to its new equilibrium insofar as rates are concerned, not going up or down much if at all.

 

Irrational exuberance.

 

Pretty well since it has been nothing but bad for Biden's entire term.

 

Yes, kind of. Rate decrease after rate decrease has been predicted or called for and every time the market goes up. The problem is, there has not been even 1 rate reduction which is why I said irrational exuberance. Sometimes people do stupid things with their money.

My prediction is actually on interest rates which I have been saying since late last fall aren't going down until the CPI gets down and stays down for enough time to know inflation has been broken. This applies to September 2024. I don't see a rate cut. In fact, inflation may have a slight uptick as the 1,000,000 gallons of gasoline release has likely run its course. The GDP is strong, unemployment is low, and inflation is still well above the Fed's 2.0% target. Why would the Feds cut into this unless it is a purely political decision which would be too little too late by September and especially so as it would start inflation on the rise again. Inflation and the southern border are on the top of everybody's list who will be voting against the democratic ticket.

If you take the stock market from January 2021 to now, it has not been all that impressive. Trump did better in his time in office and that included a covid year.