Inflation rate rises. There will be no rate reduction.

*US MAY CONSUMER PRICES RISE 0.1% M/M; EST. +0.2%
*US MAY CONSUMER PRICES RISE 2.4% Y/Y; EST. +2.5%

*US MAY CORE CPI RISES 0.1% M/M; EST. +0.3%
*US MAY CORE CPI RISES 2.8% Y/Y; EST. +2.9%

— *Walter Bloomberg (@DeItaone) June 11, 2025

There shouldn't be a rate reduction.

Owner Equivalent Rent is about 25% component of the CPI. If you back out OER (which is historically slow to reflect changes) and use an alternative method to measure price changes with respect to housing - you get a different picture. Potentially, you get a negative number but a lower number none the less.



Edit to add "US Data"

All below estimates.

I guess the "tariff" expected massive inflation projections are, well, not happening yet.

Sims said:

---

Owner Equivalent Rent is about 25% component of the CPI. If you back out OER (which is historically slow to reflect changes) and use an alternative method to measure price changes with respect to housing - you get a different picture. Potentially, you get a negative number but a lower number none the less.

---

the image is an Australian website. Why omit 25% of the calculation? At that point just make cpi look like how you want it. There is almost literally no one who would agree that their cost of goods has decreased meaningfully. So why make the reporting lie?

aTmAg said:

---

There shouldn't be a rate reduction.

---

I disagree. Interest rate reduction is the kingpin of economic growth. High rates are killing us across the board. The most important thing to get them lowered is reducing the GROWTH in federal government spending. I think the answer is to put together a 5 year plan to stop or severely limit the growth in the budget. Let the economy grow and the relative percentage of government budgets compared to GNP and we'll be on track to get things back in line.

Science Denier said:

---

All below estimates.

I guess the "tariff" expected massive inflation projections are, well, not happening yet.

---

The tariffs that keep getting paused?

Ragoo said:

---

Sims said:

---

Owner Equivalent Rent is about 25% component of the CPI. If you back out OER (which is historically slow to reflect changes) and use an alternative method to measure price changes with respect to housing - you get a different picture. Potentially, you get a negative number but a lower number none the less.

---

the image is an Australian website. Why omit 25% of the calculation? At that point just make cpi look like how you want it. There is almost literally no one who would agree that their cost of goods has decreased meaningfully. So why make the reporting lie?

---

Australian website, American data. It was the first one I found that had a friendly graph. I didn't say omit it, I said replace it with an alternative measure (specifically the Cleveland Fed New tenant rate).

I don't have an agenda other than discussion, if you want to point out the lie, get after it. All you did was fail to meaningfully consider what I posted.

Furthermore, the bolded section captures something that highlights one of the main disconnects in these types of discussions.- lower CPI still means prices are going up. The danger is that a very large group of people believe that a decreasing CPI means prices are going down. All that means is that prices are going up slower. I did mention M/M could be negative...it could be. You could have shelter dropping significantly all the while food is rising. CPI is a very broad metric. The folks buying food still hurt but if they're not selling their house, they're not interacting with the falling shelter price the measure would indicate.

Science Denier said:

---

All below estimates.

I guess the "tariff" expected massive inflation projections are, well, not happening yet.

---

hmmm but but what about "economists have said..." and "everyone knows that....."?

Teslag said:

---

Science Denier said:

---

All below estimates.

I guess the "tariff" expected massive inflation projections are, well, not happening yet.

---

The tariffs that keep getting paused?

---

Yep. And since it was the plan all along for these tariffs to not be permanent, the "keep getting paused" part was known and the *****ing still happened.

Inflation comes in cooler than expected by the Blue Chips and there shouldn't be a rate cut? Also, looks like the 10-year is dropping as well. Signs of a needed rate cut.

The president has been saying this for a while, but it's even more clear: the refusal by the Fed to cut rates is monetary malpractice. https://t.co/HqUjWxwcHs

— JD Vance (@JDVance) June 11, 2025

I'm close, but not quite on the rate cut bandwagon yet.

But, considering I'll be buying a new truck in a couple of months, it sure wouldn't hurt my feelings.

We are so addicted to artificially low interest rates. We're like a junkie going through withdrawal.

Interest rates aren't high right now by historical standards. They are normal, right around the long term median value.

With $36T in national debt and likely to grow with the Big Beautiful Ugly Bill, we're more likely to see higher interest rates long term.

Cut federal spending by 10% and then hold it flat for ten years. There will be lots of wailing, crying, and gnashing of the teeth, but we will not only be fine... we will be better off.

I say increase the fractional reserve requirement and drop the interest rate. Let the banks soak up the money printing bonanza and let the rest of us get on with life. This slow drip sucks.

MemphisAg1 said:

---

Cut federal spending by 10% and then hold it flat for ten years. There will be lots of wailing, crying, and gnashing of the teeth, but we will not only be fine... we will be better off.

---

Unfortunately, there was no choice last November for this to happen.

It was elect a liberal, or Harris (progressive).

Yay us!

I don't ever look to govt data and graphs since they often "innovate" new ways to lie via said data.

I simply go out and buy stuff. "Stuff" is still more expensive, and getting moreso faster than it should be.

Teslag said:

---

Science Denier said:

---

All below estimates.

I guess the "tariff" expected massive inflation projections are, well, not happening yet.

---

The tariffs that keep getting paused?

---

lolwut?

Science Denier said:

---

Teslag said:

---

Science Denier said:

---

All below estimates.

I guess the "tariff" expected massive inflation projections are, well, not happening yet.

---

The tariffs that keep getting paused?

---

Yep. And since it was the plan all along for these tariffs to not be permanent, the "keep getting paused" part was known and the *****ing still happened.

---

Trump just announced that we have an agreement for 55% tariffs on China going forward, i.e. permanent.

Now, since he changes his mind every damn day, who knows:

Quote:

---

June 11, 2025 / 9:13 AM EDT

Mr. Trump said the deal would see China maintain its current 10% tariffs on goods imported from the U.S., while the U.S. would keep 55% tariffs on Chinese imports.

---

https://www.cbsnews.com/news/trump-us-china-trade-deal-done-tariff-talks-london-framework/

MemphisAg1 said:

---

We are so addicted to artificially low interest rates. We're like a junkie going through withdrawal.

Interest rates aren't high right now by historical standards. They are normal, right around the long term median value.

With $36T in national debt and likely to grow with the Big Beautiful Ugly Bill, we're more likely to see higher interest rates long term.

Cut federal spending by 10% and then hold it flat for ten years. There will be lots of wailing, crying, and gnashing of the teeth, but we will not only be fine... we will be better off.

---

So, put your investor hat on for just a moment.

What is the number one best investment in a macro economic environment with an expanding money supply due to run-away government spending, and low interest rates that do not reflect that expanding money supply?

Real estate. Buy hard assets using as much cheap leverage as you can. The fixed-rate debt gets less valuable, and the underlying asset appreciates with the inflation caused by the expanding money supply. Investors are smart. US investors and global investors with exposure to the dollar will continue to buy up real estate, pushing home prices and rental rates even higher.

Ignoring housing prices when discussing the best interest rates to reduce the inflation that human beings actually feel in their budgets is putting your fingers in your ears to ignore a huge, real world problem.

Inflation is out of control. Inflation is one of those things that will lead the people of a nation to do desperate things, and listen to dangerous firebrands promising to make sweeping changes to fix the problem. It's not a great path to go down.

We need to cut government spending. Holding the line on where we are now will only work once we experience another 25% to 33% of inflation in the best scenario, and potentially run-away inflation if the dollar loses its favorable reserve status.

MemphisAg1 said:

---

We are so addicted to artificially low interest rates. We're like a junkie going through withdrawal.

Interest rates aren't high right now by historical standards. They are normal, right around the long term median value.

With $36T in national debt and likely to grow with the Big Beautiful Ugly Bill, we're more likely to see higher interest rates long term.

Cut federal spending by 10% and then hold it flat for ten years. There will be lots of wailing, crying, and gnashing of the teeth, but we will not only be fine... we will be better off.

---

The people who can't see beyond MAGA will tell you that a 10% cut is impossible. Even though inflation adjusted spending is 23% higher than it was prior to COVID.

rwtxag83 said:

---

aTmAg said:

---

There shouldn't be a rate reduction.

---

I disagree. Interest rate reduction is the kingpin of economic growth. High rates are killing us across the board. The most important thing to get them lowered is reducing the GROWTH in federal government spending. I think the answer is to put together a 5 year plan to stop or severely limit the growth in the budget. Let the economy grow and the relative percentage of government budgets compared to GNP and we'll be on track to get things back in line.

---

When government forces the rates are below the natural market rate, then that has the same detrimental effect as when government controls other prices.

Our interest rates being too low prioritizes short term spending over long term investment. It gooses the economy to SEEM like it's doing better in the short term, but it's bogus prosperity. It's just another bubble waiting to pop later.

MemphisAg1 said:

---

We are so addicted to artificially low interest rates. We're like a junkie going through withdrawal.

Interest rates aren't high right now by historical standards. They are normal, right around the long term median value.

With $36T in national debt and likely to grow with the Big Beautiful Ugly Bill, we're more likely to see higher interest rates long term.

Cut federal spending by 10% and then hold it flat for ten years. There will be lots of wailing, crying, and gnashing of the teeth, but we will not only be fine... we will be better off.

---

So you don't think Trump is correct calling it one of the best bills in the history of the country?

Yes, we are addicted to low-interest rates. It sucks. But if there's no inflation and the economy is running smoothly and the bond market is responding positively, then you absolutely should cut rates. Want to cut our deficit quickly? That's the way to do it.

We can complain about discretionary spending all we want - and believe me I want - it doesn't make a dent in the actual longterm debt. That comes from Medicare, Medicaid, Social Security, and Debt Interest.

One of those can be cut without a vote.

The other three are political suicide to cut. So until the Dems and Republicans hold hands, sing Kumbiyah, and jump into the void together, the only thing that will happen if you cut Medicare, Medicaid, and Social Security unilaterally in the BBB is the Dems will absolutely go in dry on the Republicans in the midterms and in 2028, and restore the cuts.

So get what we can, cut taxes, secure the border, and ride the wave to the bottom.

so the Fed was able to cut rates 7 months ago when INFLATION WAS HIGHER

but now that it is lower, they refuse to have another 25 basis cut.

how does this make sense?!

MemphisAg1 said:

---

We are so addicted to artificially low interest rates. We're like a junkie going through withdrawal.

Interest rates aren't high right now by historical standards. They are normal, right around the long term median value.

With $36T in national debt and likely to grow with the Big Beautiful Ugly Bill, we're more likely to see higher interest rates long term.

Cut federal spending by 10% and then hold it flat for ten years. There will be lots of wailing, crying, and gnashing of the teeth, but we will not only be fine... we will be better off.

---

Sorry. My political foresight and gratification can't extend beyond my term. It's hard enough to get a small group of people to think beyond next year, let alone an entire country.

It's (D)ifferent now.

LMCane said:

---

so the Fed was able to cut rates 7 months ago when INFLATION WAS HIGHER

but now that it is lower, they refuse to have another 25 basis cut.

how does this make sense?!

---

I'm not sure it makes sense - other than to help Biden win - but I hope it stays where it is. We spent 15 years averaging way below where we should have been. Before the housing bust in 2008, we were at 5.25. Then came Obama and Bernanke!

If you want to use my money to make more money, pay me!

Teslag said:

---

Science Denier said:

---

All below estimates.

I guess the "tariff" expected massive inflation projections are, well, not happening yet.

---

The tariffs that keep getting paused?

---

"""Art of the deal"""

Drahknor03 said:

---

Yes, we are addicted to low-interest rates. It sucks. But if there's no inflation and the economy is running smoothly and the bond market is responding positively, then you absolutely should cut rates. Want to cut our deficit quickly? That's the way to do it.

We can complain about discretionary spending all we want - and believe me I want - it doesn't make a dent in the actual longterm debt. That comes from Medicare, Medicaid, Social Security, and Debt Interest.

One of those can be cut without a vote.

The other three are political suicide to cut. So until the Dems and Republicans hold hands, sing Kumbiyah, and jump into the void together, the only thing that will happen if you cut Medicare, Medicaid, and Social Security unilaterally in the BBB is the Dems will absolutely go in dry on the Republicans in the midterms and in 2028, and restore the cuts.

So get what we can, cut taxes, secure the border, and ride the wave to the bottom.

---

Core inflation at 2.8% is still above the Fed target of 2.0%. The full impact of tariffs and supply chain disruptions haven't been felt yet in the economy. Today's bond market is only down 3 basis points, hardly a trend.

We have the big bill yet to be approved by Congress, but indications thus far suggest it is likely to increase the debt and further degrade creditworthiness of the US.

It is premature to cut rates right now.

No surprise that Trump wants rate cuts. He's a big spender and financial risk taker as evidenced by his four business bankruptcies.

I agree with him on many things but not this one.

I think the bill is dead

Funny..... **** is still getting more expensive, and that problem is getting worse by the day. My wages still aren't changing, and aren't suddenly going to go 10-50% up.

Its almost like numbers can be interpreted in a way that defys reality...

LMCane said:

---

so the Fed was able to cut rates 7 months ago when INFLATION WAS HIGHER

but now that it is lower, they refuse to have another 25 basis cut.

how does this make sense?!

---

Not an election year. Duh

Ag_of_08 said:

---

Funny..... **** is still getting more expensive, and that problem is getting worse by the day. My wages still aren't changing, and aren't suddenly going to go 10-50% up.

Its almost like numbers can be interpreted in a way that defys reality...

---

Good thing inflation is not going up 10-50%.

One thing you do need to remember re tariffs and inflation: For tariffs that do stick around, the total effect is going to take a while to hit end consumer prices. This is because a lot of suppliers that are affected are locked into longer-term contracts with their customers (18 months, etc.) and lot of them are very limited in what they can pass on right now. So as these contracts have to be renewed over the nexts few quarters, you will likely see more of these tariffs actually hitting the end consumer.

So you could make the argument that while inflation is pretty stable-ish right now (although still above target), there's logic to predicting that it will increase over the near to intermediate term.