That makes no sense. 30 year mortgage rates are now at 8%. Landlords haven't caught up yet. Rents will be going up to reflect that rate since they compete with home ownership.

The yoy has increased despite a year ago when housing prices were at their peak.

Gonna bookmark this thread. I'll be bumping it over the next few months.

jt2hunt said:

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I am hearing they are likely raising rates.

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Hopefully.

One thing they haven't done is sell bonds. The monetary base is still where it was one year ago. QT needs to be in high gear.

Rates did not suddenly rise in the last month, they've been higher since April of 2022. A person signing a lease in April 2021 was in a much cheaper housing market than a person in April of 2022, which puts pressure on rents. The change in interest rates work in proportion, so going from a 2.75% interest rate to a 4% interest rate is more impactful than going from a 5% interest rate to a 6.25% interest rate even though the absolute rate change is the same. In April of 2021 interest rates were ~2.75% to April 2022 at 5% (an 80% increase in interest paid), April of 2022 to April of 2023 interest rates rose to 6.25% (25% increase in interest paid compared to the year prior, a smaller increase in absolute and substantially smaller in proportion). That is why the rental inflation rate peaked in March and has been falling since despite higher mortgage rates. In order for shelter to continue to rise, you need interest rates to continue to rise or housing price increases to accelerate. They won't. Not substantially, not in the same proportion that they had previously.

https://tradingeconomics.com/united-states/rent-inflation

Feel free to bookmark this discussion. MoM Core PCE was .6% in August 2022 and .5% in September 2022. It would require a rapid increase in the inflation rate in August and September 2023 in order for the annual rate to maintain, much less rise. There is no indication of that happening right now. Prices are high, that doesn't mean that they are going to continue to trend higher at a rapid rate.

https://tradingeconomics.com/united-states/core-pce-price-index-mom

CPI rises 0.6% over last month and 3.7% YoY.

That is an acceleration from July's 0.2% increase and YoY rise of 3.2%.

https://finance.yahoo.com/news/inflation-consumer-prices-rise-37-in-august-as-high-oil-prices-drive-uptick-123228277.html

https://www.wsj.com/economy/august-cpi-report-inflation-slowdown-85936a0a

U.S. Inflation Accelerated in August

It will come down dramatically next month when last year's big housing number falls off the calculation.

aggiebrad94 said:

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It will come down dramatically next month when last year's big housing number falls off the calculation.

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Thankfully those in the know still use the same calculation used since 1980

Another billion to Ukraine should help curb that inflation

aggiebrad94 said:

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It will come down dramatically next month when last year's big housing number falls off the calculation.

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Lol, I was told it would come down this month.

Maroon Dawn said:

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Another billion to Ukraine should help curb that inflation

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The middle class just needs to shut up and take it. Don't be a bunch of Ivans

Logos Stick said:

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aggiebrad94 said:

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It will come down dramatically next month when last year's big housing number falls off the calculation.

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Lol, I was told it would come down this month.

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Core inflation fell from 4.7% to 4.3%. Did you change your mind about that being the metric for determining Fed action? Headline increased in large part due to rising gas and energy prices. You were advocating for higher interest rates, do you think that raising interest rates is the best process for reducing gas prices?

Inflation Reduction Act doing work!

Logos Stick said:

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aggiebrad94 said:

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It will come down dramatically next month when last year's big housing number falls off the calculation.

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Lol, I was told it would come down this month.

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I mean core inflation did come down 0.4% annualized. Gasoline was certainly an issue this month though.

hph6203 said:

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Logos Stick said:

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aggiebrad94 said:

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It will come down dramatically next month when last year's big housing number falls off the calculation.

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Lol, I was told it would come down this month.

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Core inflation fell from 4.7% to 4.3%. Did you change your mind about that being the metric for determining Fed action? Headline increased in large part due to rising gas and energy prices. You were advocating for higher interest rates, do you think that raising interest rates is the best process for reducing gas prices?

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LOL. I can't believe you actually responded to this. Stop embarrassing yourself. You predicted a decrease.You were wrong.

The Fed needs to pull the monetary base down to pre Obama level and raise rates.

Here's a clue: energy is underneath everything. It's like the ocean. The boats rise and fall with it.

If energy prices dont affect you, that's great. Please educate us on how to get around that.

It absolutely is under everything, but do you believe that increasing rates is the appropriate way in reducing prices? It is certainly not the most targetted way of reducing the primary driver of inflation over the last month.

And I don't know what math you operate under, but 4.7% to 4.3% is a smaller number. You're going from arguing core inflation, to headline inflation and doing it from a PCE report (posted in the OP) to a CPI report (released today). Stick to like for like comparisons and your claims won't pan out.

Logos Stick said:

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If energy prices dont affect you, that's great. Please educate us on how to get around that.

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They certainly do. But they tend to be more volatile month to month. Crude prices were at $95 last June. $66 in March. $80 in April. $67 in June. Back to $89 now. Weighted average for the year would be more helpful than a spot rate increase.

I bumped this because it's the first of two measures to be reported. My original post was PCE because that's what was reported at that time.

I've already answered in my response. Raise rates and make the base lower.

You are arguing inflation is under control which is baseless.

And your post in the OP was with respect to core inflation and your bump was with respect to headline inflation, your advocacy was that the fed needed to raise rates in order to reduce the rate of inflation, which was the claim you made that I was refuting.

I ask again, do you believe that fed rates are the best way to reduce the rate of increase in energy prices?

Also, the shelter index was a big contributor to the inflation rise. It rose for the 40th consecutive month. You said housing would be the reason it would go down.

Logos Stick said:

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Also, the shelter index was a big contributor to the inflation rise. It rose for the 40th consecutive month. You said housing would be the reason it would go down.

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There is a lag with the way shelter costs are calculated for inflation. Clearly home prices and rent increases have slowed in 2023. Most home prices have slightly decreased. I'd expect that number more than the other inflation indicators to slow in the near future. The average home is on the market twice as long this year as it was in 2022.

I said the expectation was that housing would go deflationary next year, not on the next report. You said that wasn't possible. I explained how it was possible.

BoydCrowder13 said:

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Logos Stick said:

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Also, the shelter index was a big contributor to the inflation rise. It rose for the 40th consecutive month. You said housing would be the reason it would go down.

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There is a lag with the way shelter costs are calculated for inflation. Clearly home prices and rent increases have slowed in 2023. Most home prices have slightly decreased. I'd expect that number more than the other inflation indicators to slow in the near future. The average home is on the market twice as long this year as it was in 2022.

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Home prices deceasing is irrelevant. Mortgages increased. Nobody pays cash for a house. It's called rentals and rental equivalents.

Went to Kroger over the weekend and purchased

5 pack of Hot Dogs
Hot Dog Buns
Chili
Shredded Cheese
Bag of Chips
Bottled Tea
Pizza Lunchable
Bite Size Brownies

$50!!!

actual inflation for the middle class is far more than 4.2%. it's somewhere between double and triple this figure for the average middle class american.

Logos Stick said:

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Also, the shelter index was a big contributor to the inflation rise. It rose for the 40th consecutive month. You said housing would be the reason it would go down.

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Anecdotal: friends daughter goes to grad school in DC area. Her rent just went up $500 per month. Lawd.

Sorry you don't have an HEB.

Logos Stick said:

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If energy prices dont affect you, that's great. Please educate us on how to get around that.

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Simple don't buy, rent, or consume stuff.

Surely you don't think rents are independent of home prices? I think what you're trying to say is that any decrease in home prices would be offset by the increase in interest rates?

And just to clarify, I didn't make any projections on shelter inflation going negative next year. I stated in my original post that the SF Fed said they believed they could go negative next year. I misstated their actual expectations in my reply to you today and said they would.

hph6203 said:

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SF Fed released a report that states they anticipate that shelter inflation will continue to fall and that it could even go negative next year. The source of the majority of inflation is dying due to the rate hikes that were already done.

https://www.frbsf.org/economic-research/publications/economic-letter/2023/august/where-is-shelter-inflation-headed/

It does not make sense to raise rates right now.

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SF Fed said:

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Our baseline forecast suggests that year-over-year shelter inflation will continue to slow through late 2024 and may even turn negative by mid-2024. This would represent a sharp turnaround in shelter inflation, with important implications for the behavior of overall inflation.

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Ol_Ag_02 said:

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Logos Stick said:

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If energy prices dont affect you, that's great. Please educate us on how to get around that.

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Simple don't buy, rent, or consume stuff.

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You will rent and you will like it.

This is a joke.

I feel like people don't understand that prices are never going to come down. This is just what things cost now. I don't think the economists are flat out lying to us about the inflation numbers right now, I just think people are angry that prices aren't what they were two years ago. When the average person hears that inflation is now 4ish% they think it's BS because their grocery bill is up 30%.

The middle class is just getting hammered.

I paid $9+ for a stick of deodorant on Monday.

They used to be 2 for 7.99 prior to this doddering, brain dead, ******* in the White House.

But just to clarify, we are all rooting for good economic news right? You know, for our neighbors and all, right?