The Beatings Will Continue Until Morale Improves

Year ovver Year


Month Over Month

Despite the fact that the Consumer Price Index (CPI) fell to 3% in June, the Federal Reserve is still sending signals that they intend to raise rates, because ……… Capricious sadism is "serious" in their circles I guess?

Consumers paid less last month for used cars and airline fares, and their rent increased at the slowest one-month pace since early 2022. Prices for car insurance and recreation services rose.

Investors cheered the figures, which affirmed the Fed was making progress in its work to stem high inflation. Stocks rose, and bond yields fell.

Fed officials are on track to raise rates to a 22-year high at their July 25-26 meeting because economic activity hasn’t slowed down as much as anticipated. But the inflation report calls into question whether the Fed will lift rates after that, as most officials projected last month.

“My guess is that they’re so locked in on another increase in July that they’ll go ahead with that,” said David Wilcox, senior economist at Bloomberg Economics and the Peterson Institute for International Economics. “The main effect it will have is to really fortify the argument around July’s hike being the last of this campaign.”

Because changing your mind when the facts changes, as John Maynard Keynes did, is clearly the mark of a complete cuck, at least in central banker land.

………

Last month they kept their benchmark federal-funds rate in a range between 5% and 5.25%. That decision marked their first pause after 10 consecutive increases since March 2022, when they raised it from near zero. 

Overall consumer prices increased a seasonally adjusted 0.2% in June from the prior month, compared with May’s 0.1% gain. Core consumer prices climbed 0.2%, just slightly above their pace in February 2021 at the start of the inflation surge. A more narrow measure of inflation that excludes goods, housing and energy was essentially flat in June from the prior month, according to Wall Street Journal calculations.

The Fed is not concerned about inflation so much as it is eager to cause a recession.