Adding a thread to dive into this concept of "super-core" inflation, a measure the Fed uses to understand what's really going on after you strip out volatile food and energy costs, and then also removing housing cost impacts which can be transitory.
Super-core is essentially the cost of everything else; some think of it as the cost of services in the broader economy. It's heavily influenced by labor cost trends, but can also be impacted by things like insurance cost and property taxes. It tends to be "sticky" and can be difficult to get under control.
So not only are we feeling it at the grocery store, gas pump, and in the mortgage/rent check, but everywhere else... as we already know, but Biden, the Dems, and media keep trying to tell us different.
Will be interesting to see what happens here and how it impacts the election with so many other wildcards like Biden's dementia, Trump's legal risk, abortion on the ballot in some swing states, etc.
My current view is if inflation doesn't get much worse, the balance of all that still falls slightly in the Dem's favor. But if we see full-on Israeli/Iranian conflict or something else that ignites gas prices and pushes inflation back up to the 8% range or higher before the election, Biden is toast.
Get your popcorn ready.
Super-core is essentially the cost of everything else; some think of it as the cost of services in the broader economy. It's heavily influenced by labor cost trends, but can also be impacted by things like insurance cost and property taxes. It tends to be "sticky" and can be difficult to get under control.
So not only are we feeling it at the grocery store, gas pump, and in the mortgage/rent check, but everywhere else... as we already know, but Biden, the Dems, and media keep trying to tell us different.
Will be interesting to see what happens here and how it impacts the election with so many other wildcards like Biden's dementia, Trump's legal risk, abortion on the ballot in some swing states, etc.
My current view is if inflation doesn't get much worse, the balance of all that still falls slightly in the Dem's favor. But if we see full-on Israeli/Iranian conflict or something else that ignites gas prices and pushes inflation back up to the 8% range or higher before the election, Biden is toast.
Get your popcorn ready.
Quote:
- Markets are buzzing about an even more specific prices gauge contained within the data the so-called supercore inflation reading.
- The gauge measures services inflation excluding food, energy and housing and has been roaring higher lately, up 4.8% year over year in March and more than 8% at a 3-month annualized pace.
- The picture is more complicated because some of the most stubborn components of services inflation are household necessities like car and housing insurance as well as property taxes.
https://www.cnbc.com/2024/04/10/the-supercore-inflation-measure-shows-fed-may-have-a-real-problem-on-its-hands.htmlQuote:
Further complicating the backdrop is a dwindling consumer savings rate and higher borrowing costs which make the central bank more likely to keep monetary policy restrictive "until something breaks," Fitzpatrick said.
The Fed will have a hard time bringing down inflation with more rate hikes because the current drivers are stickier and not as sensitive to tighter monetary policy, he cautioned. Fitzpatrick said the recent upward moves in inflation are more closely analogous to tax increases.
