After dropping for 4 straight months.

CPI came in hot also, at 2.6% yoy and rose 0.2% mom in October.

Should Powell continue to lower rates to facilitate inflation or back off?



https://www.bls.gov/charts/producer-price-index/final-demand-12-month-percent-change.htm

The US debt will force Powell to lower rates, and yes, thereby triggering inflation. But, all the talking heads will blame it on Trump and his tariffs, so Powell will get all the cover he needs.

Bloomberg is still melting down this morning about the inflation tidal wave coming because of Trump. They've been banging that drum ever since that one biased story came out.

CDUB98 said:

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The US debt will force Powell to lower rates, and yes, thereby triggering inflation. But, all the talking heads will blame it on Trump and his tariffs, so Powell will get all the cover he needs.

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I forget… How much did Trump add to the debt the last time around?

How much of the change is influenced by base effect? Even if we are essentially static m/m there will still be fairly big moves y/y since inflation has been so volatile.

rathAG05 said:

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He shouldn't have lowered rates yet to begin with. This was predictable.

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He had to in an attempt to influence the election, as I said back in January. They were never not going to try to help Kamala.

The Fed lowered rates way too early. Inflation had not been stopped. However, there is another way to reduce money in the economy and that is for the Federal Government to stop deficit spending. Will it happen? Probably not but it is another lever. Should it happen? I think we all agree it should.

Abolish the Fed. Stop MMT. Stop funding foreign wars. Eventually this model leads to a society totally dependent on gov.

aginresearch said:

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The Fed lowered rates way too early. Inflation had not been stopped. However, there is another way to reduce money in the economy and that is for the Federal Government to stop deficit spending. Will it happen? Probably not but it is another lever. Should it happen? I think we all agree it should.

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The Fed is going to get thrown under the bus until Republican and Democrat alike can get a shared vision of the economic statecraft that needs to happen in the US.

We've operated for the last 40 years like the world liked us and every widget we need from anyone will always be available to us without any strings attached. That is simply not the case today and becoming less so daily.

We need to stop spending money on misguided, non-productive endeavors that don't support our national interest.

This is why it was risky/dumb to campaign on "I will lower inflation". Nobody is getting that toothpaste back in the tube.

The prime rate would need to be well over 20% to return the market to normalcy. Obviously this will never happen as it would destroy wallstreet. So, here we are kicking the collapse can down the road.

aginresearch said:

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The Fed lowered rates way too early. Inflation had not been stopped. However, there is another way to reduce money in the economy and that is for the Federal Government to stop deficit spending. Will it happen? Probably not but it is another lever. Should it happen? I think we all agree it should.

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Without some major structural changes the government can't stop deficit spending.

Medicare, Medicaid, Social Security and interest on the debt eat up all of the revenue the federal government takes in. There's nothing left for the actual current functioning of the government without debt.

CDUB98 said:

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The US debt will force Powell to lower rates, and yes, thereby triggering inflation. But, all the talking heads will blame it on Trump and his tariffs, so Powell will get all the cover he needs.

Bloomberg is still melting down this morning about the inflation tidal wave coming because of Trump. They've been banging that drum ever since that one biased story came out.

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"Trump's" tariffs will get interesting. Imposing them is a convoluted process where the President can do some on his own, but Congress holds the keys to most. I found this article educational:

Who controls US tariffs?

Jeeper79 said:

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CDUB98 said:

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The US debt will force Powell to lower rates, and yes, thereby triggering inflation. But, all the talking heads will blame it on Trump and his tariffs, so Powell will get all the cover he needs.

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I forget… How much did Trump add to the debt the last time around?

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Your TDS is well noted, so I know you're asking this question with an agenda.

Also, you must have missed my posts over time where I have complained about Trump's spending.

Yes, Trump absolutely added to the debt in ridiculous proportions, but it wasn't out of control until all the Covid spending. That spending set a new baseline, and Biden's administration ran with it, exacerbating the problem. Inflation would not have been as bad as it was if Biden had gone back down to 2019 levels of spending.

Spiraling spending started with GWB and just got worse with each successive administration. Trump was bad on it too, but Biden was worse.

But, you just want to make a TDS point.

This has little to do with Trump, per se.

All the baked numbers will start to be revised because with Trump, they will no longer be able to hide how horrible Biden-Harris Administration was.

My only surprise is that they didn't wait until he got into office.

The real numbers must be worse than we thought.

Another Loss for Modern Monetary Policy. Krugman will fight it all the way...

rathAG05 said:

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He shouldn't have lowered rates yet to begin with. This was predictable.

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It is all by design. Let Trump take over and ensure companies crash if he can't stop inflation OR keep businesses open.

Can't keep them open if they can't fund anything with credit... All planned to go down right as he takes office.

BlueTaze said:

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Eventually this model leads to a society totally dependent on gov.

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That's the idea.