PPI and core PPI y/y slightly above consensus:
Figure 1: Instantaneous inflation (T=12, a=4) for CPI (bold blue), PCE deflator (green), PCE market based deflator (brown), and HICP (light pink), PPI (red) per Eeckhout (2023). chartreuse dashed horizontal line at 2% target for PCE deflator. Corresponding CPI target is 2.45%. HICP seasonally adjusted by author using X-13. Source: BLS, BEA, Economic Commission, and author’s calculations.
People have made strong arguments that the Trump policies will be inflationary. But you also have to take into consideration the Summers Indicator. Larry Summers has been flogging the media since the election with his predictions of rampant new inflation, even higher than previously, and since Summers is always wrong, there is a high probability that it won’t happen.
We have names for the Treasury Secretary slot – hedge fund manager Scott Bessent and Cantor Fitzgerald CEO Howard Lutnick. Though both men seem to have imbibed the Kool-aid, they are at least better qualified than most of Trump’s recent cabinet picks.
Bessent has reportedly urged a “three arrows” approach to economic policy (Abe, not the SDP), the “arrows” being easy monetary policy, tight fiscal policy and some kind of growthy stuff. So the guy is up on international economic happenings, but that wasn’t really in question. He worked for Soros. His fund has reportedly outperformed the international macro-fund sector at least some of the time, but has had its share of stumbles. AUM recently less than $600 million.
Lutnich is a long-time Trump buddy. He is one of the heads of Trump’s transition team (probably doing most of the work). He jumped into the race when Paulson pulled out.
Lutnick’s career has been in financial brokerage, while Bessent has worked in investment with a focus on international macro. Both provide useful knowledge for a Treasury Secretary.
Both men are probably getting jobs with Trump, but my money is in Lutnick for Treasury. He began raising money for Trump earlier, he has no Soros taint and I don’t think Trump is broad-minded enough to hire a gay guy for the top job. Hope I’m wrong.
Either one if these guys would eat Kudlow for lunch. Little Marco would be a snack. Problem is, it takes a very special person to last long around Trump.
This is really not a headline from The Onion:
“The Onion wins auction for Alex Jones’ media company”
https://www.npr.org/2024/11/14/nx-s1-5189399/alex-jones-auction-infowars-bankruptcy-sandy-hook