Jump to content



Photo

Inflation at fastest pace since June!


  • Please log in to reply
13 replies to this topic

#1 Rogerdodger

Rogerdodger

    Member

  • TT Member*
  • 26,863 posts

Posted 24 February 2023 - 12:10 PM

AP:

Friday’s report from the Commerce Department

 

The Federal Reserve’s preferred inflation gauge rose last month at its fastest pace since June, an alarming sign that price pressures remain entrenched in the U.S. economy and could lead the Fed to keep raising interest rates well into this year.

January’s price data exceeded forecasters’ expectations, confounding hopes that inflation was steadily decelerating and that the Fed could relent on its campaign of rate hikes. It follows other recent data that also suggested that the economy remains gripped by inflation despite the Fed’s strenuous efforts to tame it.

 

Hope Springs Eternal
 An Essay on Man ~ by Alexander Pope

 



#2 skott

skott

    Member

  • Traders-Talk User
  • 4,712 posts

Posted 24 February 2023 - 12:21 PM

Brandon running at his fastest pace too! Sub 5 minute mile.  It seems we are truly being conditioned at every turn to believe a lie.  Turning off your TV if you don't want to believe the lie but then, someone people do want to believe the lie. Take the Red or Blue pill Neo, it's funny how art precedes or at least mimics real life



#3 MikeyG

MikeyG

    Member

  • Traders-Talk User
  • 2,850 posts

Posted 25 February 2023 - 05:34 AM

Double post.

Edited by MikeyG, 25 February 2023 - 05:39 AM.

mdgcapital@protonmail.com  

papilioinvest.com

@papilioinvest

 

"One soul is worth more than the whole world." 


#4 MikeyG

MikeyG

    Member

  • Traders-Talk User
  • 2,850 posts

Posted 25 February 2023 - 05:34 AM

Not going to last, IMHO.

Female workforce participation rate increased quite a bit the past couple months to 57 percent as stay at home moms are forced back into the workplace to afford cost of living, couple that with an increase in credit card debt, which is why we saw a bump in inflation.

Also, people in general are working more hours to keep pace, taking on additional jobs, which is in the data with a large increase of .3 hours last month, also inflationary.

This obviously cannot continue as there are only certain amount of hours, jobs and debt that people can take on.

Powell said it will not be a straight line, he is right. He is also correct that disinflation process has begun. Going from 9 to 6 on CPI is just the beginning.

M2 is shrinking, and house prices are going down over the past few months, so people need to get back to work. They can no longer live off there asset prices that were rising.

Participation rate is back prepandemic levels, which caused the dead cat bounce in inflation. Next will be the belt tightening by households, which will show up later in the year in CPI, probably getting us down to 3 or 4 percent range this summer.

The market would really take off on any low inflationary economic data.

I could see us pushing toward news highs in a goldilocks scenario, that we get inflation down over the course of this year without crushing the economy. IE 3 percent on 10 year yield and earnings around 220.

I could see us making new lows on a major deflationary event. IE Fed goes too far and has to reverse course bc the economy is cratering.

Either way, inflation will go down.

Congress is going to be slightly more fiscally responsible now that we have split government, which helps as well.

As many have correctly pointed out on this board, tbe market is at a crossroads here.

IMHO, I don't see any reason right now for us not to continue to make higher lows and higher highs.

Some bullish factors right now-

Stocks are back on sale (some of them)
Vix no new high on a new market low
Sentiment is bearish
Sox no new low
SPX in a Support area
Internals are not deteriorating as fast as the beginning of the week
SPX hammer
Confluence in trend lines
TLT looks like it's turning up (I believe this is the most important)


Have a nice weekend all!

Edited by MikeyG, 25 February 2023 - 05:41 AM.

mdgcapital@protonmail.com  

papilioinvest.com

@papilioinvest

 

"One soul is worth more than the whole world." 


#5 skott

skott

    Member

  • Traders-Talk User
  • 4,712 posts

Posted 25 February 2023 - 11:47 AM

I know its only one of your points mikey but spx had a hammer the day before and 4 days ago. Slope of hope. Def at point where we could get a rally of some sort but i aint betting on it



#6 pdx5

pdx5

    I want return OF my money more than return ON my money

  • Traders-Talk User
  • 9,521 posts

Posted 25 February 2023 - 01:46 PM

MikeyG makes many logical & valid points. But one issue he did not talk about is why Inflation's of the past we're stubborn. The reason is workers get bigger raises, even us gizzers on social security got 8.7% increase. We are spending more and adding to inflation. These increases are entrenched and nearly impossible to revert. The raises are also inflationary with more spending by workers. Also making inflation last longer is timid FED reluctant to raise rates at or above current inflation level.

Edited by pdx5, 25 February 2023 - 01:48 PM.

"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule

#7 MDurkin

MDurkin

    Member

  • Traders-Talk User
  • 638 posts

Posted 25 February 2023 - 02:43 PM

MikeyG makes many logical & valid points. But one issue he did not talk about is why Inflation's of the past we're stubborn. The reason is workers get bigger raises, even us gizzers on social security got 8.7% increase. We are spending more and adding to inflation. These increases are entrenched and nearly impossible to revert. The raises are also inflationary with more spending by workers. Also making inflation last longer is timid FED reluctant to raise rates at or above current inflation level.

Yes I agree. Just got back from the food store and prices are still rising. Fed needs to raise rates above the inflation rate pronto-before this gets out of hand. If oil goes up in spring /summer we are going to have a bigger problem than now. My vote -raise the rate 1 full point to get everyone's attention.



#8 K Wave

K Wave

    Member

  • Traders-Talk User
  • 25,937 posts

Posted 25 February 2023 - 02:48 PM

MikeyG makes many logical & valid points. But one issue he did not talk about is why Inflation's of the past we're stubborn. The reason is workers get bigger raises, even us gizzers on social security got 8.7% increase. We are spending more and adding to inflation. These increases are entrenched and nearly impossible to revert. The raises are also inflationary with more spending by workers. Also making inflation last longer is timid FED reluctant to raise rates at or above current inflation level.

Give it 2 months and fed will be above YOY inflation rate at today's levels, and monthly deceleration now underway as well.

Pretty sure the Jan monthly print was a 1 off aberration. Expecting to see a lot of .1 .2 and even negative prints going forward.

 

But you can continue drive in the rear view if you like while fed reduces its balance sheet for the next few years (well at least until they panic again anyway).

 

Look at the big drivers (energy) for YOY numbers in the table that are about to go from from big time positive to big time negative over next just the next few months. And Shelter has clearly rolled over as well.

This not anywhere close to rocket science here...it is already baked in. From Feb report onwards, for some time to come, expect very low and more likely negative numbers on the YOY stuff.

 

https://www.bls.gov/...ase/cpi.nr0.htm

 

We all know what has happened to Nat Gas since December, and Fuel Oil is next. Just a matter of a bit of time for that to filter down to folks monthly bills.

 


The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy

 

 


#9 pdx5

pdx5

    I want return OF my money more than return ON my money

  • Traders-Talk User
  • 9,521 posts

Posted 26 February 2023 - 03:21 PM

Energy is down for 2 reasons
#1 Biden has been tapping strategic oil reserves at record breaking rates.
#2 China is still under lockdown in many areas.
Both are temporary factors.
Because energy inflation affects every other product inflation, there is a slight slowdown in general inflation. I am looking FORWARD and see energy inflating when China opens and strategic reserve is drained. I remember you posting 4 or 5 months ago that inflation is "done". It is down from 9.5% but still closer to 9.5% than FED target of 2%.
"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule

#10 K Wave

K Wave

    Member

  • Traders-Talk User
  • 25,937 posts

Posted 26 February 2023 - 03:38 PM

Energy is down for 2 reasons
#1 Biden has been tapping strategic oil reserves at record breaking rates.
#2 China is still under lockdown in many areas.
Both are temporary factors.
Because energy inflation affects every other product inflation, there is a slight slowdown in general inflation. I am looking FORWARD and see energy inflating when China opens and strategic reserve is drained. I remember you posting 4 or 5 months ago that inflation is "done". It is down from 9.5% but still closer to 9.5% than FED target of 2%.

 

And it has been decelerating ever since I said that.

 

Only a complete moron would think it was going to go from over 9% to very low or possibly even negative in a few months.

 

Anyway, you will see the YOY numbers I am talking about soon enough. And the ONLY reason the Jan print was over 2-3% annualized WAS energy. Let's see what Feb and March look like.


The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy