BLS: Led by shelter, hospitals & utilities CPI rose 2.7% Y-oY

[Gaius]

@GWH

Oh, yeah, I get that. I’m just saying, I don’t think even that will happen. I think the current prices of pretty much everything are where they are, and all we can hope for is minimal inflation. I’m talking 1%, possibly less, hopefully not a lot less as that would be a death spiral.

Well the Fed, which is not biased in a Trump vs non-Trump
sort of way is very definitely biased in another way.

They are very deeply biased in the dual beliefs
“We gotta help da poors,”
and
“When Congress & the WH spend a bunch of money, we gotta make sure we kick the can down the road so people don’t feel the harm right away.”

They interpret both of those in an expansive, pro-inflation manner.

• If 2% inflation were truly their target, they could achieve that in a couple of months.
• If they recognize that housing prices are out of equilibrium and causing problems, they could fix that in under a year.

They fail on both counts, not because they are biased in a R vs D sort of way,
but because of their own ideological bias

[JayJay]

Okay. Well like I said I wasn’t digging into the actual data myself… And I did say I hoped that I had misheard.

And yes of course there are people out there who are going to try and spin any slightly good news as either fake or negative towards Trump in some way.

[Gaius]

March 21, 2018
Powell’s first FOMC press conference as Chair

“Inflation appears to be moving toward the FOMC’s 2 percent longer-run goal.”

Since he reaffirmed that 2% goal in his first public statement
Inflation has averaged 5.90% per year. (Three times higher than his state goal.)

To get back to what he said, prices need to fall ~25%.

[Gaius]

I cannot think of anyone from a used car salesman to a Walmart employee who would have any credibility left after being so far off the mark so many times for 7 years in a row.

[Gaius]

@Gaius

Below is a prediction model. It is not a “want” it is a prediciton.

Imagine homes rent for 1% of selling price.
(IOW to buy a home ya gotta pay monthly rent x100)

Or, I don’t care,
you can imagine they rent for 2% of selling price
(IOW to buy a home ya gotta pay monthly rent x 50)

Let’s completely set aside our ideas about what ‘should’ happen.

Right now the blue line is so far above the green line that to restore that traditional ratio, home prices would need to fall 28%.

Chart above compares home prices to rent.
Chart below compares home prices to two different measures of income.

Hey if it happens it happens, but . . . .
Some really, really smart people think it will be good for the economy if we freeze this in position right where it is.

We should vote them out of office . . . oh wait, we can’t.

[Guvnah]

@7426k

People are making way too much of potential limitations in this month’s report.

Likewise way too much about potential positives.

And it’s only one data point in history.

In a month we’ll get another. And a month after that, another. And so on. And that’s when we can start to say that this-trend or that-trend is happening, and that today’s number was properly indicating movement in this-direction or that-direction.

All the rest is posturing from one side or the other.

[Guvnah]

@GWH

I was looking hard in 2018, could have doubled my money in 3 years with the gift of foresight. And I thought it was overpriced then.

Likewise people looking at the price of gold. (Or at least I was.) But then again, I got my current stash of gold before the turn of the century (and people were telling me it was high then.)
.