Apparently Bloomberg uses a different set of economic forecasters:
(Links below)
Bloomberg:
US Core CPI Comes in Below Forecasts for Fifth Month
Core CPI comes in below estimates for fifth straight month
Inflation in services, vehicles cooled in June
Tariff impacts in furniture, electronics offset by weakness elsewhere
CNBC:
CPI comes in as expected
The consumer price index in June increased 0.3% on the month, putting the annual inflation rate at 2.7%, matching a consensus poll from Dow Jones.
So-called core CPI, which excludes food and energy prices, also matched estimates and grew by 0.2% for the month, moving the annual rate moving to 2.9%.
WSJ:
Tariffs Start to Seep Into Prices
Inflation picked up in June, a potential sign that companies are starting to pass tariff costs on to consumers.
Consumer prices rose 2.7% in June from a year earlier, the Labor Department said Tuesday, faster than May’s increase of 2.4%.
That was in line with the expectations of economists surveyed by The Wall Street Journal.
Core inflation excluding volatile food and energy prices was 2.9%, also in line with forecasts.
Meanwhile housing inflation — BY FAR — the largest part of the CPI market basket, came in at 0.3% M-o-M. That make 33 consecutive months it is twice as high as the fed’s target.
All by itself housing inflation adds 1.25% to the CPI.
As long as the government stays in the business of propping that up,
hitting the Fed’s 2% inflation target will require all other inflation to be infinitesimally small.
Yup
Housing inflation is 3.659% annualized (still higher that 4% TTM)
To hit the Fed’s 2% goal everything else would need to e a teensy weensy 1.42% annualized
We don’t hit thatmark outside of recesson.
We have hit that 1.42% goal four times in my life:
As a conservative I do not believe the Fed should not be in the business of cutting rates (except for extreme circumstances.)
Janet Yellen left some serious time bombs for this adminisrtation, but they are not so extreme. In fact, at the time she did so she probably thought the D’s would win the WH.
So . . . core CPI includes al those items that do not tend to fluctuate with a single OPEC annoucnement, or single bad coffee harvest etc…
Shelter, is by far it’s biggest component
Furniture and Bedding — rose 0.4%, but it fel 0.8% last month
Women’s suits and dresses — down
Girls and boys footwear — down
Jewelry and watched — down
New cars — down
New trucks — down
Used cars and trucks — down
Telephones, calculators etc, — down
Enough imported items rose that I should not ignore them,
but in general, inflation is not being led by “stuff” inflation, not domestic, and not imported, housing is driving inflation.
If your news service is not covering that fact, either it is biased,
or it assumes you already know that fact and housing inflation = top high is no longer newsworthy.
I find it surpising that I am on Jerome Powell’s side.
Usually I am one of his detractors.
Inflaton, led by housing (not tariffe items) is well above target and has spent, what? 48 months above target. This is not the time to be cutting rates.
(He does however have my permission to stop subisidizing at risk banks and let them fail. That might be reported as a rate cut, but it is the right thing to do and we should not let idiot journalists who choose the wrong word dictate monetary policy.)
Just today I was listening to a podcast discussion, part of which dealt with how much the mortgage system (and the finance system more broadly) so heavily leans towards policies that prop up the largest banks at the expense of competition and smaller firms. And no, it was not a podcast from 2009. Or 1997. Or 1989(?).
I am skeptical of the large vs small narrative.
I sense it is tainted by politics
(“Yaaargh big companies are bad and the governmtn is their puppet. We are slaves and they secretly control everything.”)
Nonetheless the Fed is subisidizing banks and, I believe, often interprets their 'stabilize the banking sector" mandate that way.
I believe most businesses fail and certainly lots and lots musicians fail, and film projects fail, and book ideas fail . . . . and yet BECAUSE we allow such a high failure rate, America leads the world in music and film and publishing.
The point about large financial institutions was simply that they have an implicit subsidy because everyone knows they will be bailed out. When SVB collapsed, deposits at the largest banks surged - because everyone with more than 250K in deposits knew the largest banks wouldn’t fail.
