Do we care about CPI anymore?
- Thread starter DW4_2016
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CPI out here in about 30 minutes. Big number as it will influence rate decisions next week.
Last few prints have come in in-line with expectations. If that is the case this time, that is a good sign as it means all goods beside gasoline will be coming down. It's my opinion the market will view an in line print as good because oil is expected to be a temporary high and not permanent.
Last few prints have come in in-line with expectations. If that is the case this time, that is a good sign as it means all goods beside gasoline will be coming down. It's my opinion the market will view an in line print as good because oil is expected to be a temporary high and not permanent.
They are not going to increase rates. Mid term Politics trumps consumers
Agreed. I've been saying as much for weeks.
1) A rate hike is not needed and will be counterproductive. Inflation on core items is around 2.5%, close to target. Inflation is coming from housing and energy. Energy will only be helped by an Iran resolution, rates wont matter. Housing actually needs rates to come down to increase supply. No one that has a 2-3% mortgage can move when rates are at 8%. A hike will be counter productive and inflationary to housing.
2) Warsh wasn't hired to raise rates.
Market implying 70-30 they WILL hike so we are in the minority opinion here.
A lot rides on the inflation print here in 20 minutes. A hot print will almost certainly mean we are wrong. An in-line print and i think that current 70-30 switches to 40-60 real quick.
We will find out soon enough,.
Wholesale inflation picked up last month after cooling earlier this summer as higher oil and gas prices stemming from the Iran war keep costs elevated. The Labor Department’s producer price index — which captures inflation before it reaches consumers — rose 5.4% in August from a year ago, up from 4.8% in July, the government said Thursday. Annual wholesale inflation peaked this year at 5.9% in May after the Iran conflict raised energy costs. On a monthly basis, wholesale prices increased 0.4% from July to August, after a 0.1% increase the previous month.
it seems unlikely that cpi would not go up. But given that the Trump White House just completely fudged the 150K jobs added ******** number, who knows?
Republicans accused Democrats of cooking the jobs numbers and they were correct. The Biden admin had 1 million ghost jobs that were never there.
Time will tell if Republicans are doing the same.
Until then, we go off the data we do have. CPI will be released here in 5 minutes, we can discuss then.
I believe Warsh is between a rock and a hard place. Just wait until the Genius Act kicks in and stable coin purchases roll into 93 days or less Treasury note purchases destroying over night repo and short term rate controls
you can't pretend to be the guy who is super-informed about all this stuff...but not know that revisions to job reports are par for the course.
yes, the revisions were larger than normal in 2024 and 2025 (weird that "democrats" were trying to overcount jobs in the first year of the new trump admin) - but revisions themselves, even ones in the "hundreds of thousands" order of magnitude, are nothing new
Revisions Published With (Thankfully) Little Fanfare - AAF
The Bureau of Labor Statistics (BLS) released its annual preliminary benchmark revision last Friday to little fanfare (more on that later), estimating total nonfarm employment for the 12 months through March 2026 was overcounted by 79,000. The revisions were smaller than the historical average...
www.americanactionforum.org
NQ put/call at 1.86. 29,250 looks like the life saver for the institutional options writers imho
This is my argument.
Inflation is coming from high gas. Raising rates isn't going to help gas come down.
And, yes I do think there is something to this.
Notice Bessent did not use his full allotment in the treasury auction yesterday. I can't think of a reason he didn't other than wanting to play poker with the market and then playing cards to juice the market late october.
Notice Bessent did not use his full allotment in the treasury auction yesterday. I can't think of a reason he didn't other than wanting to play poker with the market and then playing cards to juice the market late october.
Going through the numbers ...... i think it's going to be dems that go Banana's.
I'm going to stick with my call of no hike next week. I realize i'm against bigly here. There is a reason the market sold off and is now rallying. People are digesting the report.
Revisions are common.you can't pretend to be the guy who is super-informed about all this stuff...but not know that revisions to job reports are par for the course.
yes, the revisions were larger than normal in 2024 and 2025 (weird that "democrats" were trying to overcount jobs in the first year of the new trump admin) - but revisions themselves, even ones in the "hundreds of thousands" order of magnitude, are nothing new
Revisions Published With (Thankfully) Little Fanfare - AAF
The Bureau of Labor Statistics (BLS) released its annual preliminary benchmark revision last Friday to little fanfare (more on that later), estimating total nonfarm employment for the 12 months through March 2026 was overcounted by 79,000. The revisions were smaller than the historical average...
The consistency the Biden admin would push false numbers and retract them 3 months later was unprecedented.
Its one thing to be off, its another thing to be off, and always high, every month.
Rate hikes won't help the two biggest drivers of inflation. See Below.
I like the odds. I get 85-15 odds of a rate hike. I'm taking the 15.
I like the odds. I get 85-15 odds of a rate hike. I'm taking the 15.
It's related to the bond market activity.
Guessing you skipped Econ 101 in college?
And.....BIDEN'S FAULT
I’m with you. Trump won’t let him hike rates.
I also think this admin is betting on AI to reduce inflation. All this anti data center rhetoric is so toxic to our country. If you believe there is an existential threat, then why would you not want the US to be in control of that threat? Not to mention, our debt, cost of living, etc has one way out and that is through deployment of AI. We should be building these as quickly as possible as a matter of national security.
While true that demand for US debt has waned, inflation - the primary focus of the fed - is being driven by the war in Iran.
Ummmmm…… you guys do realize 2025 had the most downward revisions ever, right? Or is that bidens fault as well?
Trump gave answers this week that "the war won't end until after the midterms".
That clearly indicates fuel costs will continue to spike.
Whatever the underlying reasons, the Fed/Warsh can't wait to raise rates.
The only question seems to be one or two increases?
I don’t disagree that they need to. But you have to remember that a guy who bankrupted casinos is calling the shots. Making smart decisions isn’t something he does.
Fair point.
But there was division from the Fed Governors at the last meeting.
Warsh's credibility, long term, is at stake here, imo.
Warsh is a bit of a mystery and that's why i think there is no hike. If Powell were still Chair, i firmly believe there would be a hike. However, this being Warsh's first meeting, I think he sees the data the way I do and I think he bucks the trend keeping rates unchanged. I'm obviously in a very big minority with that viewpoint. But i get good odds for that viewpoint at these price, imo.
well, thinking out loud, since the main issues are housing and oil, raising rates does nothing for housing, and nothing for oil, but might have an impact on prices for consumers in direction opposite what we need. Higher interest rates will hurt consumers given our high credit card debt...cost of money for small and large business...
I have no idea what data FED governors are looking at, but simply following the "high inflation, raise rates" rule, might not be the right thing here. We'll see
has always been, but we've lived with it. When I went to college, 4% was ok, over the past 50 years, we averaged 3.2%..it wasn't until 2012 that we went to the 2% goal...
I'm no
Maybe we're in a rope a dope....
not sure I believe trump (any more than I think I'm getting a $5,000 dividend). He's been saying for months "war will be over shortly" now he says war won't be over for 2 months.
Maybe we're in a rope a dope....
I hate inflation. It is theft and it hurts the lowest class the most.
However, our chance to check inflation was DOGE and it was soundly rejected by both parties.
My views on inflation have changed as a result.
I think we have to tolerate some inflation to get the growth needed since we are unwilling to make cuts to entitlement s
Without "boots on the ground" Iran will never be defeated.
The real power in Iran, the IRGC, likely isn't suffering enough to cave.
And they know this war is unpopular with Americans.
This is a "no win" for Trump.
What he needs is to declare victory and GTFO.
It has been the #1 thing in the business news since 2022 so of course we still care.
Trump campaigned on getting prices down but anybody who thought he could do that was/is naive. The country had a labor shortage coming out of Covid and workers used that opportunity to demand higher wages. Port workers, UAW, UPS, nurses, steel workers, Teamsters, etc all negotiated big wage increases. Those things have a snowball effect to other industries that had to keep up if they hoped to attract and retain workers. Nobody is giving those large wage increases back so prices weren't likely to come down. The best we could hope for is to slow the rate of additional inflation. IMO we were in pretty good shape until the Iran war.
2021 7.0%
2022 6.5%
2023 3.4%
2024 2.9%
2025 2.7%
2026 3.2%
Oil prices fell from over ~$100 in 2024 to ~$75 before the war and that helped keep inflation on the decline. Now it's close to $90 again. Deisel prices had fallen to ~$3.50 before the war but have since risen to just under $6.00.
I disagree with people who say we need higher rates to slow the economy. The economy remains strong but it certainly isn't overheating. It's not a case of too many dollars chasing after too few goods. It's all about the war. Raising interest rates isn't going to lower oil and gas prices. It just increases interest on the debt and makes mortgages, car loans, business loans more expensive for consumers.
Just imho
I don't believe the market is digesting shite other than a time, price and sentiment convergence to squeeze shorts to protect strikes on written options.
Talking heads are high lighting a meaningless small drop in crude. CL futures at 99.75. LOL
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