![]() To add to the hyper-partisan split, former president Donald Trump is urging Republican congressmen to dig in and resist raising the debt limit, even if it means default. Paralysis is the word that comes to mind. It is difficult to come to an agreement between a hyper-partisan congress that is demanding billions (trillions?) in spending cuts now while the White House is demanding that the ceiling be raised as is and that budget talks take place separately. The potential nightmare that doesn’t go away-yes, the debt ceiling limit. While food and energy costs, particularly energy costs, have been coming down, housing and some other core prices have remained sticky at higher levels. Apparently, the culprit is housing costs. How could the core come in higher than the actual CPI? Food and energy are considered the most volatile elements of the CPI hence, why they are removed to calculate the core. core CPI (ex: food and energy) came in 5.5% y-o-y. With central bank rates at 3.75% and 4.5%, the ECB has some catching up to do. Latest figures show inflation in the ECB is 7.0% and in the U.K. Indeed, the ECB hiked rates again by 25 bp as did the U.K. But the European Central Bank (ECB) may not be done yet. Canada, we suspect, is also in a holding pattern. ![]() Inflation appears poised to remain sticky for the foreseeable future. There are still hawkish Fed governors that don’t quite see the end of rate hikes just yet. Report, we suspect, should put an end to thoughts of rate cuts unless we see a serious drop in employment over the next several months. ![]() As we know, the Fed is data driven and we’d have to see a serious deterioration in the economy to think of rate cuts. But will it mean that the Fed is going to cut rates later this year? Not likely. What it has done, we suspect, is end any thoughts that the Fed might hike rates once again at the June 13–14 FOMC. The PPI for April came in up 0.2%, below the expected 0.3% gain. The Producer Price Index (PPI) also came out this past week. Is this enough to bring down the rate of inflation to even lower levels? The Fed discount rate is now at 5–5.25% which is equal to or slightly above the inflation rate. Neither lasted long enough to make any long-term impact. Only two brief spikes were seen above that level in 19. It remains higher than it has been for the most part over the past 40 years. At 4.9% year-over-year (y-o-y), it was the first time under 5% in two years. CPI came out and, once again, it came in slightly below expectations. Shlomo Riskin, Orthodox rabbi, founder of Lincoln Square Synagogue, Upper West Side, New York City, founding chief rabbi of Efrat an Israeli settlement, author, chancellor b: 1940 When you’re two steps ahead, you’re a crackpot.” “When you’re one step ahead of the crowd, you’re a genius. John Maynard Keynes, English economist and philosopher, whose ideas changed the theory and practice of macroeconomics and economic policies of governments, father of Keynesian economics 1883–1946 ![]() “Successful investing is anticipating the anticipations of others.” Larry Williams, American stock and commodity trader, author, political candidate in Montana, father of actress Michelle Williams b: 1942 “When the public buys toilet paper, I buy stocks.” ![]()
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