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Not to let the banks off the hook, but >They did a pretty good job during COVID One word: "transitory".

by yterdy 4y ago

danielmarkbruce 4y ago
It was surprisingly accurate.... mom inflation has been reasonable for several months now
- nervlord 4y ago
  That's.. Delusional. It's barely budged.
  - danielmarkbruce 4y ago
    https://www.bls.gov/news.release/pdf/cpi.pdf https://www.bls.gov/news.release/pdf/cpi.pdf Note all the months since July 2022. It's good to read the source material rather than hyperventilating news articles.
    - anon20230311 4y ago
      Mean MoM % change in CPI-U from January to preceding July, 2016-2023: * 2016: 0.01 * 2017: 0.20 * 2018: 0.27 * 2019: 0.10 * 2020: 0.21 * 2021: 0.30 * 2022: 0.61 * 2023: 0.27 Raw monthly data: https://data.bls.gov/timeseries/CUSR0000SA0&output_view=pct_1mth https://data.bls.gov/timeseries/CUSR0000SA0&output_view=pct_... I was skeptical that month-over-month CPI had come down to reasonable levels over a wider time window, but it is much lower than the same period a year ago, and close to recent historical norms outside that inflationary spike. I am eager to see Tuesday's numbers for February inflation.
- yterdy 4y ago
  By that metric, and it took quite a bit longer to get there than ideal. It's also still elevated historically and compared to FFR, all of which is a roundabout way of saying that inflation has and continues to destabilize the outlook. Stability historically comes after an n-month lag of the FFR and core inflation meeting, right? Well, banks are failing now, and 4Q24 is a ways off. I just don't know if I'd call it a "pretty good job," is all. They were caught-off guard and didn't move quickly enough.
  - danielmarkbruce 4y ago
    They are always caught off guard. Try predicting anything macro and see how well it goes to plan. Then try not moving too fast or too slow. The idea that they aren't doing a good job because they aren't perfectly precise with their timing is misguided. It's a crazy hard job.
    - yterdy 4y ago
      The difficulty is somewhat artificial. Their statements give away the game, namely their obsession with a "soft landing." Translation: an undue focus on securities markets and saving entities who'd made bad investments, i.e., picking winners. They were late because they were trying to balance a factor that isn't part of their quasi-mandate (but that is important to politicians, and to the institutions that Fed officers revolving doored from). Without that factor, you see radical hikes in 2021 and QT not being undermined by waves hands vaguely. It hurts, but less than what's coming now.
      - danielmarkbruce 4y ago
        The only entities they seem to worry about is banks. And banks going under is bad news for everyone, always has been. Being a lender of last resort to banks is explicitly part of their mandate.
        pishpash 4y ago
        They worry about banks because they are a bank. If it weren't for government oversight they'd be a private bank.
        yterdy 4y ago
        >The only entities they seem to worry about is banks. You'll have to support thay with something. Again, the language of their correspondence over the past few years says otherwise.
chii 4y ago
And it was. The prediction was that covid supply/demand constraints would resolve when covid problems clear themselves. Unless, of course, you are expecting the Fed to predict the war in ukraine, the energy crisis, etc. And in any case, people who take the Fed's predictions at face value, and base their financial positions on it, can only blame themselves when the Feds do something contrary (as they are always entitled to). These predictions aren't promises.
throw0101c 4y ago
> One word: "transitory". It has been. We're barely at 1.5-2 years in length and it looks to be either stabilized and perhaps dropping. A number of folks estimated that the COVID recovery stimulus would take about this long to work its way through the system, using Korean War spending as an analogue: * https://www.piie.com/blogs/realtime-economic-issues-watch/inflation-fears-and-biden-stimulus-look-korean-war-not-vietnam https://www.piie.com/blogs/realtime-economic-issues-watch/in... The fact that energy and food prices spiked due to geopolitical events threw a monkey wrench in the works temporarily, but now that those have stabilized, so has inflation.
- yterdy 4y ago
  The magnitude matters, too. Stimulus did not constitute an annualized increase in average consumer purchasing power equivalent to the inflation we've seen. I imagine that wage inflation fills the difference, but of course, the stimulus is over and wage growth is not enough. So "transitory" is not an accurate characterization for most people looking at their finances; it has come to eat their purchasing ability, and stayed.

Not to let the banks off the hook, but >They did a pretty good job during COVID One word: "transitory".

by yterdy 4y ago

Not to let the banks off the hook, but >They did a pretty good job during COVID One word: "transitory".

danielmarkbruce 4y ago

It was surprisingly accurate.... mom inflation has been reasonable for several months now

nervlord 4y ago
That's.. Delusional. It's barely budged.
- danielmarkbruce 4y ago
  https://www.bls.gov/news.release/pdf/cpi.pdf https://www.bls.gov/news.release/pdf/cpi.pdf Note all the months since July 2022. It's good to read the source material rather than hyperventilating news articles.
  - anon20230311 4y ago
    Mean MoM % change in CPI-U from January to preceding July, 2016-2023: * 2016: 0.01 * 2017: 0.20 * 2018: 0.27 * 2019: 0.10 * 2020: 0.21 * 2021: 0.30 * 2022: 0.61 * 2023: 0.27 Raw monthly data: https://data.bls.gov/timeseries/CUSR0000SA0&output_view=pct_1mth https://data.bls.gov/timeseries/CUSR0000SA0&output_view=pct_... I was skeptical that month-over-month CPI had come down to reasonable levels over a wider time window, but it is much lower than the same period a year ago, and close to recent historical norms outside that inflationary spike. I am eager to see Tuesday's numbers for February inflation.
yterdy 4y ago
By that metric, and it took quite a bit longer to get there than ideal. It's also still elevated historically and compared to FFR, all of which is a roundabout way of saying that inflation has and continues to destabilize the outlook. Stability historically comes after an n-month lag of the FFR and core inflation meeting, right? Well, banks are failing now, and 4Q24 is a ways off. I just don't know if I'd call it a "pretty good job," is all. They were caught-off guard and didn't move quickly enough.
- danielmarkbruce 4y ago
  They are always caught off guard. Try predicting anything macro and see how well it goes to plan. Then try not moving too fast or too slow. The idea that they aren't doing a good job because they aren't perfectly precise with their timing is misguided. It's a crazy hard job.
  - yterdy 4y ago
    The difficulty is somewhat artificial. Their statements give away the game, namely their obsession with a "soft landing." Translation: an undue focus on securities markets and saving entities who'd made bad investments, i.e., picking winners. They were late because they were trying to balance a factor that isn't part of their quasi-mandate (but that is important to politicians, and to the institutions that Fed officers revolving doored from). Without that factor, you see radical hikes in 2021 and QT not being undermined by waves hands vaguely. It hurts, but less than what's coming now.
    - danielmarkbruce 4y ago
      The only entities they seem to worry about is banks. And banks going under is bad news for everyone, always has been. Being a lender of last resort to banks is explicitly part of their mandate.
      - pishpash 4y ago
        They worry about banks because they are a bank. If it weren't for government oversight they'd be a private bank.
      - yterdy 4y ago
        >The only entities they seem to worry about is banks. You'll have to support thay with something. Again, the language of their correspondence over the past few years says otherwise.

chii 4y ago

And it was. The prediction was that covid supply/demand constraints would resolve when covid problems clear themselves. Unless, of course, you are expecting the Fed to predict the war in ukraine, the energy crisis, etc. And in any case, people who take the Fed's predictions at face value, and base their financial positions on it, can only blame themselves when the Feds do something contrary (as they are always entitled to). These predictions aren't promises.

throw0101c 4y ago

> One word: "transitory". It has been. We're barely at 1.5-2 years in length and it looks to be either stabilized and perhaps dropping. A number of folks estimated that the COVID recovery stimulus would take about this long to work its way through the system, using Korean War spending as an analogue: * https://www.piie.com/blogs/realtime-economic-issues-watch/inflation-fears-and-biden-stimulus-look-korean-war-not-vietnam https://www.piie.com/blogs/realtime-economic-issues-watch/in... The fact that energy and food prices spiked due to geopolitical events threw a monkey wrench in the works temporarily, but now that those have stabilized, so has inflation.

yterdy 4y ago
The magnitude matters, too. Stimulus did not constitute an annualized increase in average consumer purchasing power equivalent to the inflation we've seen. I imagine that wage inflation fills the difference, but of course, the stimulus is over and wage growth is not enough. So "transitory" is not an accurate characterization for most people looking at their finances; it has come to eat their purchasing ability, and stayed.