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Inflation coming in hot boys!!
HuskyBuck
Member, Swaye's Wigwam Posts: 3,073 
in Tug Tavern
Whew I’m sweating off some weight watching that PPI number come in!!
Comments
Services came in hot. Goods not nearly as much. Agreed that it’s not time to cut rates.
Will be interested to hear how tariffs drove this PPI inflation. Let us know.
I buy retail not wholesale
Lotta different sectors going in different directions. I can see arguments for cuts but tend to agree I think the fed should stay put currently. Overall consumption seems to be maintaining despite the rates and as long as that holds true rates should hold.
Like ever though if you wait until things start deflating to cut rates it's too late.
While the high rates are making the cost of capital higher I have to wonder if they are acting as their own dollar milkshake proping up demand for US debt. Gotta take a closer look at the bond markets.
They may have to cut just because the market expectation is that they will cut.
a dark day for America
Bobs the voice of reason. It’s borderline. Jobs are starting to fade but number starting to heat up. I wouldn’t be in favor of a 50 point rate cut in September….25 points wouldn’t be out of the question.
Yeap, already priced in. Shouldn't be that way but it's current reality.
The fed has become too involved in the market and Powell hasn't helped that relationship imo.
I doubt we are going to see it get any better with the next appointee given Trump's attitude.
I think we all agree. Cold day in hell and all.
Bot said vanilla sucks ass and this
While the high rates are making the cost of capital higher I have to wonder if they are acting as their own dollar milkshake proping up demand for US debt. Gotta take a closer look at the bond markets.Interesting thread. I hadn't thought of this but then again I can't be an expert in everything. My initial thought on the politics is that young folks want lower rates to buy a house and don't much care beyond that.
Trump wants lower maintenance costs on the debt but if that reduces demand then what.
Buck actually can contribute when he wants to.
My other layman's take is that making policy on the ups and downs of
recruitingerr the market isn't all that bright.Yeah I think there is something to that. All this Fed talk on rates and tariffs is a sideshow to the main course which is the bond. Cut the spending and you need to issue less bonds and you’ll get better rates regardless of what the fed rate is.
As we've discussed, the opposite is mostly true as well, cut rates with no meaningful change and bond markets won't eat it.
You'd see a repeat of big lenders making a killing as their rates from the fed decrease while retail rates don't.
The only rate anyone on main street gives a shit about is the 30-year mortgage rate.
Also, the bigger issue with high housing costs is not rates, it's that prices in most areas have not dropped in any meaningful way after going nuts during COVID. They'll continue to stay up so long as new housing supply doesn't increase at a much quicker rate (see red states vs blue states to understand how to fuck up supply). Outside of the Great Recession and COVID hitting back-to-back, 6.5% is a pretty damn good rate to buy a house.
Correct. And the 30 year mortgage rate and every other kind of debt or equity valuation is based off the t bill rates.
I would say that interest rates are near the bottom of why housing is so hard to get for Average Joe
Land use, green energy requirement and excessive regulation top the list We bought at 11% in 1985 but the house was only 90 grand. It was old stock in an "up and coming" neighborhood.
Yeap, price is more so the issue than rates.
Which is the result of squeezing supply with regulations and subsidizing demand. Nothing like the government "making housing affordable" to help drive up property taxes.
The oligarch families that run the Fed get an extra trillion a year while the interest rate is high as it increases the interest on the national debt. That's why the rate has not come down and they know their goose is cooked and Trump may organize the end the fed.
lots of words to say the problem is fascism