Economy

[Separation Scientist]

1 hour ago, OlDawg said:

The Fed’s target rate is 2%. There will never be 0% inflation.

We don't want 0%. 2%-2.5% is the target inflation.

Trump has reduced Bidens hyperinflation from 9% down to his 2.7%. Still a tiny bit of work to do but it came WAY down from Biden. Gas is very cheap for summer driving too. It normally goes way up but it did not this summer. Yeah, Trump did that!    

[OlDawg]

41 minutes ago, Boyz N Da Hood said:

We heard inflation for 4 years like that was the issue.. obviously it never was, supposedly it's back to where we were pre pandemic yet hardly any changes in prices.. arguably worse in areas

Many things affect prices. Wages, government spending, disease among crops/livestock/poultry, weather, war, energy, tariffs…

Inflation is never caused by a single item problem.

The current tariffs aren’t effecting prices at this time. This is a shell game being played by producers/sellers to squeeze a little more profit, and a general excuse for poor company performance. Good management teams are doing just fine as the markets attest.

Tariff costs will hit. But, mainly Brazil. The others are already incorporated into costs. The effective, all-inclusive tariff rate is about 13-15%. Producers are basically absorbing the 10%. With the passage of the BBB, real wage increases (increases minus inflation) should wind up around $3500-$10k/yr. for the average family making ~$70k/year. Obviously, those not paying income tax now will have minimal benefit. That’s where increased medical costs may hurt them.

Medical costs will need to be addressed, or there will be major sticker shock.

I’d expect produce, coffee, chocolate, and beef all to rise in price. But beef is as much due to the screwworm invasion, drought, and low domestic cattle numbers as it is tariffs on Brazil. We only import 20% of our beef from Brazil. Shelf stable items should remain about the same as what they are currently.

I still expect a 50 basis point cut by the Fed in September. I could be wrong. But, they’re behind the 8 ball as I mentioned earlier.

[OlDawg]

2 minutes ago, Separation Scientist said:

We don't want 0%. 2%-2.5% is the target inflation.

Trump has reduced Bidens hyperinflation from 9% down to his 2.7%. Still a tiny bit of work to do but it came WAY down from Biden. Gas is very cheap for summer driving too. It normally goes way up but it did not this summer. Yeah, Trump did that!    

Correct. You don’t want 0% inflation.

[OlDawg]

All bets are off if the court rules Trump can’t impose tariffs in the manner he has used. I’d expect that decision to come out by mid to late next month.

Also, I’m FIRMLY against the Trump Administration looking to take a 10% stake in Intel. This is no better than Soylndra, or any other ‘too big to fail’ venture. This is a form of socialism/communism, and shouldn’t even be on the table. We’ve (Biden Admin) already given Intel over $10 Billion, and they’ve done nothing. The government has no business using our money to take a stakeholder position in any company.

Very disappointed in him even contemplating this fiasco.

[OlDawg]

A little worried Powell (a lawyer--not an economist for those that didn't know) won't cut rates in September. He seems to be relying way too much on backward looking data & some strange sense of precognition of what he thinks tariffs MIGHT do. Real data actually shows a slowing job market, and businesses beating their earnings estimates by 2x.

As usual, he's gonna' be late to the game, and have to make more adjustments because of either:

• His personal dislike of Trump.
• He's forgotten the dual core mission of the Fed is to maintain the dollar at a constant value, and seek full employment. Nothing more.
• An ingrained belief that he can see the future even though data says otherwise.

He's killing the housing market, and hurting small business' ability to borrow and hire. We'll be lucky if he doesn't run us smack dab into stagflation.

(That said, if you happen to have some spare laying around right now, there are some decent bargains on the pullback of this week. Personally, I wouldn't hesitate. There's no signs of a recession on the horizon. Find a good dividend payer, and buy at a discount. Especially if you're younger, and have time on your side.)

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DISCLAIMER: I'm not an analyst. Simply someone who was a FIRE movement member before anyone even knew what it was, and have been living on investments for over a decade. So, I do keep a pretty close watch.

 

 

[LumRaiderFan]

21 minutes ago, OlDawg said:

A little worried Powell (a lawyer--not an economist for those that didn't know) won't cut rates in September. He seems to be relying way too much on backward looking data & some strange sense of precognition of what he thinks tariffs MIGHT do. Real data actually shows a slowing job market, and businesses beating their earnings estimates by 2x.

As usual, he's gonna' be late to the game, and have to make more adjustments because of either:

• His personal dislike of Trump.
• He's forgotten the dual core mission of the Fed is to maintain the dollar at a constant value, and seek full employment. Nothing more.
• An ingrained belief that he can see the future even though data says otherwise.

He's killing the housing market, and hurting small business' ability to borrow and hire. We'll be lucky if he doesn't run us smack dab into stagflation.

(That said, if you happen to have some spare laying around right now, there are some decent bargains on the pullback of this week. Personally, I wouldn't hesitate. There's no signs of a recession on the horizon. Find a good dividend payer, and buy at a discount. Especially if you're younger, and have time on your side.)

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DISCLAIMER: I'm not an analyst. Simply someone who was a FIRE movement member before anyone even knew what it was, and have been living on investments for over a decade. So, I do keep a pretty close watch.

 

 

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From the article:

Unless the Fed and Jerome Powell get their act together, our real estate ecosystem will become one large stagnation.

[thetragichippy]

5 minutes ago, LumRaiderFan said:

Unless the Fed and Jerome Powell get their act together, our real estate ecosystem will become one large stagnation.

I'm trying to get back to Hardin county and their is not much "new" showing up. I look twice a day at Realtor.com. People are sitting on their homes waiting for the rates to drop to upgrade or move......