Everything that contributed to the sudden inflation was set into motion or already happened before 2021, with the exception of the American Rescue Plan (bipartisan congressional bill that Trump would've also signed since he approved the even larger previous version), the keystone pipeline (negligible effect on global oil prices) and Russian invasion of Ukraine (I guess Trump likely would've rolled out the red carpet for his broski).

Trump's policies actually contributed far more to inflation than Biden's:
Massive tax cuts for the sector of the economy where it was neither needed nor deserved.
Massive increases in spending
Huge deficits
Continuation of Federal Reserve QE ($40 billion+/month)
America First fuckery, simultaneously implementing trade tariffs on multiple nations and commodities (contributed to supply chain disruptions)

Right. Dementia Joe is a superstar president. Very unfair that only 20% of Americans agree with you. We, as a people, do not deserve such a great president. Maybe he should step down to teach us a lesson. Even reinstall Trump to really screw us. We'd certainly be more appreciative after suffering through another round of $2/gal gas, zero inflation, strong stock market, high employment, no Russian invasions, lower crime, and someone who isn't regarded as a retard by foreign leaders. That was a horrible time. Much better now.

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I :heart; Q

Well, there are facts, and you are also entitled to your feelings based opinions.
Thank you for sharing, and well aware here that many Americans feel the same way
(angry old farts shouting at Fox news clouds)

Liar!

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The REAL truth is....both of the forum idiots are OWNED.
-BOTH of them have no clue who their owner is.
-They are both card carrying narcissists.
^These are PROVED facts.

Why Is Inflation So High?
Taylor Tepper
Updated: Jul 13, 2022, 2:35pm

Dashing hopes inflation was starting to level off, the Labor Department reported that the Consumer Price Index (CPI) in June grew by its highest level since November 1981.

CPI rose 9.1% in the month, up from 8.6% rate in May, exceeding the 8.8% gain economists were expecting. On a month-over-month basis, CPI rose 1.3% compared with May, topping expectations for a 1.1% gain.

The headline June CPI data appeared to rebuke to the narrative that inflation may have peaked in the U.S. Nevertheless, the core CPI data for June - up 5.9%, still below the recent high of 6.5% in March - offered a ray of hope inflation could yet be leveling off.

Stock markets have reacted calmly to the news, in a strong contrast to the steep market losses seen following the disappointing April and May CPI inflation reports.

CPI Inflation Highest Since 1981
The headline June CPI data was shocking: year-over-year CPI growth surged to 9.1% from a 8.6% gain in May.

"This morning's CPI number is staggering - the number is much higher than expected and, more importantly, it is showing that inflation hasn't peaked whatsoever," said Chris Zaccarelli, chief investment officer at the Independent Advisor Alliance.

But the year-over-year core CPI data offered some comfort, moderating for a third month in a row - up 5.9%, compared to up 6% in May and up 6.2% in April - well below the March peak.

Components of the report seemed to show that high inflation is becoming embedded in the U.S. economy. Food prices rose 1.0% month over month and 10.4% compared with a year ago. Energy prices were up 7.5% on a monthly basis and are up 41.6% over the past 12 months. New vehicle prices were up 1.6% compared with May and 7.1% year over year.

The latest CPI numbers come after the Labor Department reported the U.S. economy added 390,000 jobs in June, exceeding economist expectations of 372,000 new jobs. The Labor Department reported U.S. wages were up 5.1% year over year in June, but rising prices prevent many Americans from getting more mileage out of their growing paychecks.

In late June, the Commerce Department reported that the core personal consumption expenditures (PCE) price index was up 4.7% in May, slightly slower than its 4.9% year-over-year gain in April. Core PCE is the Federal Reserve's preferred inflation measure.

Inflation Remains Enemy #1 for the Fed
Inflation has been the Federal Reserve's enemy number one in 2022, and the Federal Open Market Committee (FOMC) has made aggressive changes to U.S. monetary policy to bring inflation down to its long-term target of around 2%.

In June, the FOMC raised its target range for the federal funds rate by 75 basis points (bps), its first interest rate hike of that size since November 1994.

Several Fed governors have suggested that one or two additional 75 basis point rate hikes may be appropriate to curb inflation. The June CPI number likely ensures the FOMC will continue to take an aggressive policy approach at the upcoming Fed meeting on July 26-27.

Interestingly, market expectations are rising for a 10o bps rate hike. According to CME Group, markets are currently pricing in a 73% chance of a 100 bps rate hike, which would bring the fed funds rate to between 2.50% and 2.75%. The market is only pricing in a 27% chance for a 75 bps rate increase.

"The question that has to be asked, especially after the Fed's surprise move from a well-telegraphed 50-bps interest rate hike expected for the June meeting, that switched dramatically to a 75-bps move following last month's higher than expected CPI report, is a 1% interest rate option going to be discussed at this month's Fed meeting," says Quincy Krosby, chief equity strategist at LPL Financial.

Could Inflation Help Spark a Recession?
The Fed is facing a difficult balancing act, needing to raise interest rates aggressively to bring down inflation without triggering a U.S. recession.

Rising interest rates increase borrowing costs for companies and consumers, weighing on economic activity. Up to this point, the U.S. labor market has been solid, but the S&P 500's 20% year-to-date decline reflects concerns on Wall Street that the economy may not take spiking interest rates in stride.

Zaccarelli says that he does not anticipate a U.S. recession in 2022, but he recommends investors position their portfolios defensively for the time being.

"Because of those headwinds, we have maintained a defensive posture, with lower duration and higher quality in fixed income and lower beta, less growth and less high [price-to-earnings] exposure within equities," he says.

Growth stocks are particularly sensitive to rising interest rates because fund managers typically use discounted cash flow models to determine their price targets for growth stocks. Future cash flows are considered less valuable when the discounted rate is higher.

So far in 2022, the Russell 1000 Growth Index is down 27.3%, while the Russell 1000 Value Index is down 13.6%.

Inflation isn't necessarily bad news for every stock market sector, however. Soaring oil, natural gas and other commodity prices have helped energy sector stocks generate record profits in 2022. The Energy Select Sector SPDR Fund (XLE) is up 21.5% so far this year amid broad-based market weakness.

John Lynch, chief investment officer at Comerica Bank Wealth Management, says inflation numbers are forcing investors to shift their focus from accommodative monetary policies to underlying fundamental valuation metrics.

"Persistent inflation requires investor acceptance that equity valuation is no longer supported by low market interest rates but dependent on earnings and income. We look for volatility to continue until equity markets accept that the Fed's target rate gets to at least 3%, and not obsess over the magnitude of incremental moves at the next several policy meetings," Lynch says.

What's Next?
Investors will be monitoring the Fed's commentary on the economy at its upcoming meeting. The U.S. Bureau of Economic Analysis (BEA) will release the June PCE reading on July 29. CPI and PCE measure inflation based on pricing a basket of goods.

The two baskets are different, and the formulas used to calculate each measure are not the same. The CPI calculation is based on a survey of goods consumers buy, whereas the PCE is based on a survey of goods businesses sell.

Jeffrey Roach, chief economist for LPL Financial, says the Fed doesn't focus on the CPI number, making the May PCE reading critical.

"The core PCE deflator, which accounts for substitution effects, is the important metric. However, the odds of a 75 basis point hike in July are looking more likely," Roach says.

Signs that at least PCE inflation is moderating could be very bullish news for the economy and the stock market.

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The REAL truth is....both of the forum idiots are OWNED.
-BOTH of them have no clue who their owner is.
-They are both card carrying narcissists.
^These are PROVED facts.

Edited: 07/19/2022 at 01:40 PM by Fish Killer

$3.89, and that's beachside.

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add a signature since I'm here in profile anyway

Do any of you Republicans understand why gas was cheap while Trump was president?

How can you absolutely defend Capitalism when you have no clue as to how it actually works?

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I was right.

Yes. Because the oil companies, for imexplicable reasons, decided not to profiteer under Trump. But they changed their minds about that when Dementia Joe came in. Got that about right?

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I :heart; Q

Fail. LOLZ!



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I was right.

Not stupid enough, huh? I can only venture down so far on the IQ scale.

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I :heart; Q

Coleslaw...as stupid as they come!

Fact.

-------------------------
The REAL truth is....both of the forum idiots are OWNED.
-BOTH of them have no clue who their owner is.
-They are both card carrying narcissists.
^These are PROVED facts.