Including PPI and nowcasted PCE:
Figure 1: Instantaneous inflation for core CPI (blue), chained core CPI (tan), supercore CPI (pink), services supercore (light green), PPI core (red), and PCE core (green), per Eeckhout (2023), T=12, a=4. PCE deflator for November is y/y nowcast as of 12/11/2024. Source: BLS, BEA via FRED, BLS, Pawel Skrzypczynski, Cleveland Fed, and author’s calculations.
Notice supercore inflation is flat, and services supercore down. PPI core is also down for two months.
given this data, would you recommend the fed drop rates again and by how much, or should they hold steady?
my personal situation would benefit greatly from another drop in rates. but the data suggests holding steady is a real option.
personally, i can live with inflation where it is right now. i don’t think 2% target is necessary. the current rate gives my savings a nice boost. but i want to refinance my mortgage to the 2% rate that trump promised me during the election, so we have quite a bit of rate movement left to take.
Biden is making good use of presidential power:
https://www.politico.com/news/2024/12/12/biden-commutes-1500-pardons-39-in-single-day-00193951
Sounds like maybe more to come.
He should enact the trump tarrifs before walking out the door. Leave trump a mess to have to clean up. For some reason, i no longer feel the need to play fair against a criminal.
Here’s the NY Fed on winners and losers under tariffs:
https://libertystreeteconomics.newyorkfed.org/2024/12/do-import-tariffs-protect-u-s-firms/
“What we find… is that most firms suffered large valuation losses on tariff-announcement days. We also document that these financial losses translated into future reductions in profits, employment, sales, and labor productivity.”
So, tariffs aren’t just bad for the economy in aggregate, but pretty much for everybody.
Imagine – a policy that hurts most businesses and most individuals, and the Felon-in-Chief used it to get elected. Thank goodness his other central policy goal, expelling immigrant workers, will make it all better…?
Rybczynski help us!