Traders brace for another hot inflation number with CPI on tap
$Tesla (TSLA.US)$ $Apple (AAPL.US)$ $Netflix (NFLX.US)$ Get ready for some early action this morning as the consumer price index for October is published at 8:30 a.m. ET. The figure is expected to come in flaming once again, rising 5.8% Y/Y, though some economists even see a 5.9% advance or above, which would be the biggest Y/Y increase since December 1990. While the Fed has maintained that the pickup in inflation will be transitory (how long is that?), the stance has recently shifted with the central now seeing prices staying elevated into next year. Inflation at the wholesale level rose 8.6% Y/Y in October.
Analyst commentary: "There's a risk it could be even higher," Grant Thornton chief economist Diane Swonk declared. "We've got some unusual distortions with used car prices, airfares going up and hotel room rates rising. You could get some surge prices in services, at the same time you had a snapback in used car prices and new car prices also went up because demand went up with the flooding from summer hurricanes."
Economists expect core CPI, which excludes food and energy and is the Fed's preferred gauge of inflation, to have risen 4.3% Y/Y. That would be the fifth consecutive month above the 4% level, and if things were to continue heating up, it could prompt the central bank to speed up tapering or raise interest rates sooner than expected. Yesterday, Treasury Secretary and ex-Fed Chair Janet Yellen said policymakers would not allow a repeat of 1970s-level inflation, and the recent price pressures were a result of supply bottlenecks, labor shortages and heavy consumer spending. Amid a big bull market, U.S. contends with a soaring Misery Index.
How is the CPI calculated? The measure uses a "basket of goods" approach that aims to compare costs of various consumer goods and services. These can include transportation, food, rent, haircuts and medical care (80,000 items are included in the report). Each month, data collectors from the Bureau of Labor Statistics call, visit, or check the websites of thousands of retail stores, professional offices and other establishments to assess nationwide price information. Specialists then examine the data for accuracy and make statistical adjustments based on any given item's value. Fed's Daly looking to summer 2022 for clarity on inflation.
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kradic34 : Is this affected by the epidemic?
Brandon Golden : Time to End the FED
Geminiasianboi Brandon Golden : I almost wish they would! Every once in a while they do come in handy.... (like helping to bail us out during 2008 financial crisis). The problem is they do not know when to stop "meddling", which sets us up for the next crisis. Do they ever blame their actions for our economic problems? (of course not... they believe they are saving us... and that they know what is best). They have succeeded in getting us into a new stock market and Real estate bubble, by their actions. When the bubble's do burst.... Remember who was really at fault when they try shifting the blame. And of course they will "rush in to save the day".... as they set us up for the next financial crisis.
IT farmer : Xi has been smiling every day since january 20th.
Marvan IT farmer : So has most of the world.
Thank you, America's voters.
r8ntdxstAw : biden-flation is out of control.
carririlin Geminiasianboi : What should we do now?
xoshi8HiuI r8ntdxstAw : Here we go again. Politicizing everything.
7KMNtrPYB1 r8ntdxstAw : Right, because the former guy totally didn't embrace MMT, run significant deficits, or wish for negative interest rates to fuel cheap debt.
Nothing will change until everyone wakes up and realizes that both mainstream political parties are the problem. But, this is exactly what they want - for people to be too occupied arguing Their Team vs. Your Team while both teams collectively laugh at all of you.
LTDrYYZbAO 7KMNtrPYB1 : "Their Team vs. Your Team while both teams collectively laugh at all of you."
Well said.