7 ms·

CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up

80 points by impish9208 1y ago

bix6 1y ago
100% odds the Fed cuts but inflation seems entrenched. Will the cut really help pull the labor market up? Tourism is down, AI is up, etc.
- buellerbueller 1y ago
  >Will the cut really help pull the labor market up? The capitalists don't care about the labor market as much as they do the stock market. In Trump's crazy Tilt-a-Whirl Policy and Tariff Generator (TM), what business would invest in expansion beyond what is necessary to grease the palms that need greasing? Way too much uncertainty. Time for stock buybacks.
  - gruez 1y ago
    >what business would invest in expansion beyond what is necessary to grease the palms that need greasing? Way too much uncertainty. Time for stock buybacks. AI and AI related companies are the opposite of this.
    - buellerbueller 1y ago
      You're right, as far as I can tell, which will help further wreck the labor market and juice the stocks for the capitalists. AI companies are an existential threat to those who don't control the AIs. All of the "good AI" scenarios that the AIcolytes espouse assume we have bent AI to our whims permanently.
    - brendoelfrendo 1y ago
      AI is not going to be able to grow geometrically forever. OpenAI and Oracle just signed a $300 billion contract. OpenAI doesn't have $300 billion. Oracle doesn't have enough chips on hand nor enough cash to buy them in order to fulfill these obligations. Based on RPO, Oracle is estimating that their cloud revenues will grow from roughly $10 billion now to $144 billion by 2030. That's insane, and yet it was enough to send their stock price up 25%.
      - rsync 1y ago
        ORCX exists … I was very tempted by long dated puts on this when the intro-day high of +40% was reached…
- ddddang 1y ago
  [dead]
- goalieca 1y ago
  The tech sector labor bubble started popping last year. I don’t think we’ve hit bottom yet. Stocks are at an all time high riding the AI bubble but I think that too will pop despite the soft landing certain tech leaders will hope for.
  - Dumblydorr 1y ago
    We already had a soft landing last year right? That referred to coming out of the pandemic inflation without recession. This year is tariffs, trade wars, uncertainty, AI, labor markets, mass firings, mass deportations. Seems like we’re into a new phase of potential stagflation.
- baby-yoda 1y ago
  90% expected probability of a cut at the moment, down from 96% a week ago. A surprise no-cut would send a shock to the market IMO. https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html https://www.cmegroup.com/markets/interest-rates/cme-fedwatch...
  - bix6 1y ago
    That’s 100% is it not? There’s 0% for current and then a split between the two potential cut amounts.
    - baby-yoda 1y ago
      You're right - I'm so used to looking at the probabilities waterfall diagram where there's always some percent for status quo I glanced right over it not being there. In the time since I originally posted that the 400-425 basis point level has dipped another 2%, with that amount going towards a 50 basis point cut. Very muddy waters indeed. Powell has been adamant about fighting inflation so I struggle to understand how the market gives a zero percent chance of status quo.
      - bix6 1y ago
        It got me initially as well! I’m with you on Powell but I feel like he’s tired of fighting Trump so he’ll throw a cut just to get everyone off his back a bit.
  - m101 1y ago
    How these things are calculated is dumb: The market implied rate (from swaps/forwards curves) for the following period is something like 27bps cut, so they say: - 27 Is bigger than 25, so 0 cuts is 0% - attribute 2/25bps likelihood to 50bps cut - the remainder is left to 25bps cut The reality is that there's a non-zero probability to unchanged, and a non-zero probability of 75bps+ cut etc etc. However this information would probably be in swaption prices and too complicated for anyone like the CME or media to make sense of. But at least with the way people talk about it they get to feel like they're making sense of the world.
- seneca 1y ago
  Polymarket puts a cut at 98% likely currently: https://polymarket.com/event/fed-decision-in-september?tid=1757599215479 https://polymarket.com/event/fed-decision-in-september?tid=1...
  - ksec 1y ago
    Wow. Let me buy no Change.
    - Workaccount2 1y ago
      Unemployment pretty much guarantees the cut. Inflation is in the backseat.
- cosmicgadget 1y ago
  Would be funny if the FOMC postponed voting until after the courts make a decision on the Cook "dismissal".
tlogan 1y ago
If you look at the numbers, the key driver is rents (technically listed as "shelter"). Shelter has a large weight in the CPI basket, and its 12-month increase was 3.6% (comparing to 2.9%) Rents in San Francisco (and LA) are skyrocketing. And that cannot be easily explained. Not sure what’s causing this. What do you think?
- marticode 1y ago
  Lack of construction is likely the problem. High financing costs, expensive construction material (a lot of it is imported, like Canadian wood) and disappearing construction workers is probably all contributing.
  - tlogan 1y ago
    But house prices did not increase. According to Redfin, the median home sale price was up 1.2% YoY in July 2025. [1] [1] https://www.redfin.com/us-housing-market https://www.redfin.com/us-housing-market
    - jeffbee 1y ago
      Shelter prices roll into CPI over 12 months.
  - skeezyboy 1y ago
    > expensive construction material (a lot of it is imported, like Canadian wood) Im sorry but the single justification for the richest country on the planet still building houses out of wood was that it was cheap and abundant. Now I find theyre importing at increased cost.... so tell me again why you all live in wooden sheds?
- mlinsey 1y ago
  Those markets are very supply constrained. Despite a few recent piecemeal reforms, it's still very hard to build new housing (and it takes time to build more, with things like construction costs also becoming more expensive recently). When supply is constrained, anything that increases demand - like return-to-office mandates finally bringing back workers who left for other states during the pandemic, or a boom in AI investment causing headcount and salary growth in a small sector that's very geographically concentrated in a single rent market - will greatly increase the price.
shoo 1y ago
I've heard a few economists interviewed about the estimated impact of tariffs, an argument is that tariffs should lead to higher prices for US consumers, but as a one-time price increase, not a sustained level of price inflation. That said, it's curious that this CPI news release highlighted "shelter" as a driver: > The index for shelter rose 0.4 percent in August and was the largest factor in the all items monthly increase. The US may import a lot of things... but probably not shelter. Wonder how much of rent inflation is driven by fixed rate mortgages from the zirp era needing to be refinanced at today's higher mortgage rates.
- tlogan 1y ago
  My naive expectation was: - Rents would go down because deportation of illegals will reduce demand - Prices of goods would skyrocket because of tariffs But instead, rents went way up. Could this be driven by the push to return to the office?
  - Aurornis 1y ago
    > Rents would go down because deportation of illegals will reduce demand The number of people deported is negligible. Around 200,000 people. Despite all the news and drama, this number isn’t actually very different than normal. Any large country will have a steady stream of deportations if they enforce immigration laws. It has been like this for a long time. Don’t believe the news and political rhetoric. Look at numbers. Do no trust any political claims without looking at the numbers.
    - Yoric 1y ago
      As far as I can tell from a distance (I live in Europe), it seems to be more violent than usual, though. Is that correct?
      - Aurornis 1y ago
        They are trying to make a big show of it with the masks and big public events, yes. It’s all political drama and it’s very sad that it’s like this.
cj 1y ago
What is the target rate? Was under the impression that 2-3% is the target. Less than that is bad. More than that, also bad.
- andxor 1y ago
  The target is 2 percent. Persistent 3 percent inflation is a whole different planet.
  - cosmicgadget 1y ago
    Ferenginar, after they abandoned the latinum standard.
- etrautmann 1y ago
  I am not an economist but would guess that three feels quite different from two.
- altcognito 1y ago
  2% was the target over the long haul (not 3%) -- BUT it is a dual mandate to keep unemployment to a minimum as well. This is considered on the high end of that part of the inflation mandate, and as another comment stated -- if it is persistent, it will be seen as a negative.
  - cj 1y ago
    Compared to the past 12-24 months, 2.9% doesn't seem to be particularly worse than previous months. E.g. it was even higher at 3% at the beginning of the year and it has been at 2.7% for the past few months. Might not be at the 2% target, but at least looking at the graph, 2.9% isn't making me panic. Maybe the panic is warranted, I don't know. https://www.cnbc.com/2025/09/11/consumer-prices-rose-at-annual-rate-of-2point9percent-in-august-as-weekly-jobless-claims-jump.html#:~:text=target%20is%202%25.-,On%20employment,-%2C%20the%20Labor%20Department https://www.cnbc.com/2025/09/11/consumer-prices-rose-at-annu... Edit: Although maybe it does get more worrying if the hypothesis is that reducing rates will result in upward pressure on inflation. That could be worrisome.
jeffbee 1y ago
Federal outlays +8%. DOGE was a scam and you all fell for it.
- esafak 1y ago
  Musk was vocally against the increased federal spending.
  - SR2Z 1y ago
    And yet he did not meaningfully reduce government spending with DOGE at all. He did pilfer a copy of the SSA database, though.
    - softwaredoug 1y ago
      And managed to neuter agencies regulating his companies
    - deleted 1y ago
      [deleted]
    - esafak 1y ago
      I don't think that was his intention, or that he feigned anger at the outcome.
- throw0101d 1y ago
  > DOGE was a scam and you all fell for it. Who is this "you" that you talk about? There were many folks talking about all the 'saving money' was just a veneer; a sampling: * http://archive.is/https://www.theatlantic.com/politics/archive/2025/05/musk-doge-spending-cuts/682736/ http://archive.is/https://www.theatlantic.com/politics/archi... * https://www.epi.org/blog/doge-is-not-worth-engaging-you-cant-cut-your-way-to-a-federal-government-that-does-more/ https://www.epi.org/blog/doge-is-not-worth-engaging-you-cant... * https://www.msnbc.com/katy-tur/watch/doge-isn-t-about-money-it-s-about-malice-and-punishing-members-of-the-deep-state-french-233001541850 https://www.msnbc.com/katy-tur/watch/doge-isn-t-about-money-... Even the libertarian Cato Institute: * https://www.cato.org/blog/six-ways-understand-doge-predict-its-future-behavior https://www.cato.org/blog/six-ways-understand-doge-predict-i... The hypothesis of an 'ideological purge' was fairly common.
m101 1y ago
12*0.4% is 4.8% Inflation is running at an annualised 4.8%. The 2.9% number is backward looking. Sure monthly inflation is more volatile, but the direction of travel is up, and that running average of 2.9% will be increasing slowly as it incorporates the recent higher prints. Edit: the seasonally adjusted change is 0.4% actually, with the monthly change 0.3%
- jlongr 1y ago
  You concede that monthly inflation is volatile but then proceed to assume it is has grown uniformly and speculate that it will continue to grow uniformly? Umm...
  - UncleMeat 1y ago
    The point is that the annual number is often rather confusing from a reporting perspective.
    - m101 1y ago
      And that an annual number is diluted and will only feed in slowly over time. If we knew inflation was permanently at 5% from now on, a blend with 2% for 11 months and 5% for 1 month, is not informative.
      - jlongr 1y ago
        Pointless observation.
    - jlongr 1y ago
      They said: "12*0.4% is 4.8%. Inflation is running at an annualised 4.8%." This is patently wrong.
      - readthenotes1 1y ago
        Because it's 1.04^12? Or are you addressing some other flaw?
cs702 1y ago
The Fed's inflation target is a long-term stable 2% annual increase in prices of personal consumption expenditures (PCE): https://www.federalreserve.gov/economy-at-a-glance-inflation-pce.htm https://www.federalreserve.gov/economy-at-a-glance-inflation... The motivation for 2%/year is that when inflation is lower, businesses and consumers tend to hoard more cash, instead of spending or investing it, reducing economic activity, and when inflation is higher, it tends to become self-reinforcing and can spiral out of control: Businesses raise prices and employees demand higher pay to keep up with expected rising costs. Deflation (prices decreasing every year) is undesirable, because it forces businesses and consumers to spend and invest less, but no one ever wants to earn less (e.g., employees don't like pay cuts), so deflation tends to shrink economic activity even more, and in the worst case, can induce a depression, with businesses spending and investing less because consumers are spending less, and consumers, in turn, spending less because businesses are spending and investing less. I'm of course oversimplifying, to keep things short. Inflation remains above target, but thankfully, as of now, it doesn't appear to be self-reinforcing. I mean, I hope it isn't: https://news.ycombinator.com/item?id=45182111 https://news.ycombinator.com/item?id=45182111
- skdjbd 1y ago
  > The motivation for 2%/year is that when inflation is lower, businesses and consumers tend to hoard more cash, instead of spending or investing it, reducing economic activity That’s what they say. In reality, inflation is a permanent tax on those who earn money through labor. Every greenback they print makes 90% of us a little poorer, and conversely makes the capital holders richer. Popular economists should be thought of as a priestly class employed to enforce this order with explanations like the one you gave above. Defending a system that has resulted in an ever increasing wealth gap and the proliferation of businesses who optimize for accumulating capital is indefensible. There are other systems (https://en.m.wikipedia.org/wiki/Social_credit https://en.m.wikipedia.org/wiki/Social_credit). The economy should serve the people, not the elites. It’s hard to read a lot of economic discussion when the system is so fundamentally flawed. It’s not workable as is.
  - MattPalmer1086 1y ago
mensetmanusman 1y ago
Energy raw materials decreasing, complexity of grid management capital and operation due to renewables intermittency increasing energy costs for consumers. Germany is ahead on these cost burdens.
thiago_fm 1y ago
FED is caught between a rock and a hard place, in a double bind. Because of jobs data, it will 100% cut interest rates in the next 2-3 FED meetings with inflation clearly showing an upwards trend. US could print money for over a decade because of China exporting deflation to it and the world, now that China is an enemy, it's up for a rude awakening. Monetary policies matter, the Dollar will suffer great debasement (it already is). Imagine how many dollars are in supply around the world, and now the world is quitting the dollar. There'll be too many dollars for too little demand. Fasten your seatbelts... The country will become industrialized for the wrong reasons -- by becoming poorer.
- Workaccount2 1y ago
  >The country will become industrialized for the wrong reasons -- by becoming poorer. Trump is a populist. That is the goal. The elite will get hammered and the bottom will be pulled up. The country will be net poorer, but the bottom will be higher than it was before. At least that's how the plan is sold on paper.
  - thiago_fm 1y ago
    I can understand that, but both the elite and the bottom will be pulled down with the policy. As I've mentioned, industrialization will happen benefiting jobs for blue collars, but you'll have lots of inflation. And inflation hurts a lot the poor, as they have little to zero discretionary income. It's like a sales tax, it affects the poor more than the rich, proportional to how much they have available to spend. A country with lots of factories can't afford suburbs, F150s, houses (instead of small condos). I know this because I live in Germany, and we do have factories, but the life you can afford working in one of them is much more humble than a construction worker in the US can already right now. Americans will need to learn to live on cramped spaces and stuff that doesn't make sense, as they'll really hate it. There's no way the US government will have money to maintain all that suburban infrastructure, huge defense expenses without being high in the value chain.
  - duxup 1y ago
    Trump is a populist in rhetoric only. I don't think his actions demonstrate he is a populist via policy. His excuses might be his rhetoric but his actions don't match.
sciencesama 1y ago
Does this mean the rates will fall ?
Workaccount2 1y ago
Interestingly treasury yields are down on this news, whereas on paper you would expect the opposite. Equities are up, on paper you would expect a toss-up (lower rate cut pushing down, inflation pushing up). Gold is down slightly. All this suggests these numbers, while being inflationary, are better then anticipated.
- m101 1y ago
  What is probably going on is the following: - if inflation picks up again it will have to be controlled - going by 1970s experience it may be that an engineered recession is required to bring inflation down - recession fears is risk-off - risk-off means go into bonds and out of stocks But yeah, inflation is a double edged sword on bonds. To some extent higher inflation expectations should mean that yields on bonds should go up to provide a consistent real return.
- rsync 1y ago
  You are correct that this is confusing… one of these markets, broadly speaking, is wrong. I think the bond market is betting on no rate cut and we are seeing early entrants into a larger flight to safety.
tlogan 1y ago
I got downvoted for asking this - but let me ask again: The key driver for inflation seems to rents (technically listed as "shelter"). Shelter has a large weight in the CPI basket, and its 12-month increase was 3.6% (comparing to 2.9%). Am I wrong here in reading the data? If I’m wrong please correct me. I assume the downvote is because I’m not correct.

80 points by impish9208 1y ago

bix6 1y ago

100% odds the Fed cuts but inflation seems entrenched. Will the cut really help pull the labor market up? Tourism is down, AI is up, etc.

buellerbueller 1y ago
>Will the cut really help pull the labor market up? The capitalists don't care about the labor market as much as they do the stock market. In Trump's crazy Tilt-a-Whirl Policy and Tariff Generator (TM), what business would invest in expansion beyond what is necessary to grease the palms that need greasing? Way too much uncertainty. Time for stock buybacks.
- gruez 1y ago
  >what business would invest in expansion beyond what is necessary to grease the palms that need greasing? Way too much uncertainty. Time for stock buybacks. AI and AI related companies are the opposite of this.
  - buellerbueller 1y ago
    You're right, as far as I can tell, which will help further wreck the labor market and juice the stocks for the capitalists. AI companies are an existential threat to those who don't control the AIs. All of the "good AI" scenarios that the AIcolytes espouse assume we have bent AI to our whims permanently.
  - brendoelfrendo 1y ago
    AI is not going to be able to grow geometrically forever. OpenAI and Oracle just signed a $300 billion contract. OpenAI doesn't have $300 billion. Oracle doesn't have enough chips on hand nor enough cash to buy them in order to fulfill these obligations. Based on RPO, Oracle is estimating that their cloud revenues will grow from roughly $10 billion now to $144 billion by 2030. That's insane, and yet it was enough to send their stock price up 25%.
    - rsync 1y ago
      ORCX exists … I was very tempted by long dated puts on this when the intro-day high of +40% was reached…
ddddang 1y ago
[dead]
goalieca 1y ago
The tech sector labor bubble started popping last year. I don’t think we’ve hit bottom yet. Stocks are at an all time high riding the AI bubble but I think that too will pop despite the soft landing certain tech leaders will hope for.
- Dumblydorr 1y ago
  We already had a soft landing last year right? That referred to coming out of the pandemic inflation without recession. This year is tariffs, trade wars, uncertainty, AI, labor markets, mass firings, mass deportations. Seems like we’re into a new phase of potential stagflation.
baby-yoda 1y ago
90% expected probability of a cut at the moment, down from 96% a week ago. A surprise no-cut would send a shock to the market IMO. https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html https://www.cmegroup.com/markets/interest-rates/cme-fedwatch...
- bix6 1y ago
  That’s 100% is it not? There’s 0% for current and then a split between the two potential cut amounts.
  - baby-yoda 1y ago
    You're right - I'm so used to looking at the probabilities waterfall diagram where there's always some percent for status quo I glanced right over it not being there. In the time since I originally posted that the 400-425 basis point level has dipped another 2%, with that amount going towards a 50 basis point cut. Very muddy waters indeed. Powell has been adamant about fighting inflation so I struggle to understand how the market gives a zero percent chance of status quo.
    - bix6 1y ago
      It got me initially as well! I’m with you on Powell but I feel like he’s tired of fighting Trump so he’ll throw a cut just to get everyone off his back a bit.
- m101 1y ago
  How these things are calculated is dumb: The market implied rate (from swaps/forwards curves) for the following period is something like 27bps cut, so they say: - 27 Is bigger than 25, so 0 cuts is 0% - attribute 2/25bps likelihood to 50bps cut - the remainder is left to 25bps cut The reality is that there's a non-zero probability to unchanged, and a non-zero probability of 75bps+ cut etc etc. However this information would probably be in swaption prices and too complicated for anyone like the CME or media to make sense of. But at least with the way people talk about it they get to feel like they're making sense of the world.
seneca 1y ago
Polymarket puts a cut at 98% likely currently: https://polymarket.com/event/fed-decision-in-september?tid=1757599215479 https://polymarket.com/event/fed-decision-in-september?tid=1...
- ksec 1y ago
  Wow. Let me buy no Change.
  - Workaccount2 1y ago
    Unemployment pretty much guarantees the cut. Inflation is in the backseat.
cosmicgadget 1y ago
Would be funny if the FOMC postponed voting until after the courts make a decision on the Cook "dismissal".

tlogan 1y ago

If you look at the numbers, the key driver is rents (technically listed as "shelter"). Shelter has a large weight in the CPI basket, and its 12-month increase was 3.6% (comparing to 2.9%) Rents in San Francisco (and LA) are skyrocketing. And that cannot be easily explained. Not sure what’s causing this. What do you think?

marticode 1y ago
Lack of construction is likely the problem. High financing costs, expensive construction material (a lot of it is imported, like Canadian wood) and disappearing construction workers is probably all contributing.
- tlogan 1y ago
  But house prices did not increase. According to Redfin, the median home sale price was up 1.2% YoY in July 2025. [1] [1] https://www.redfin.com/us-housing-market https://www.redfin.com/us-housing-market
  - jeffbee 1y ago
    Shelter prices roll into CPI over 12 months.
- skeezyboy 1y ago
  > expensive construction material (a lot of it is imported, like Canadian wood) Im sorry but the single justification for the richest country on the planet still building houses out of wood was that it was cheap and abundant. Now I find theyre importing at increased cost.... so tell me again why you all live in wooden sheds?
mlinsey 1y ago
Those markets are very supply constrained. Despite a few recent piecemeal reforms, it's still very hard to build new housing (and it takes time to build more, with things like construction costs also becoming more expensive recently). When supply is constrained, anything that increases demand - like return-to-office mandates finally bringing back workers who left for other states during the pandemic, or a boom in AI investment causing headcount and salary growth in a small sector that's very geographically concentrated in a single rent market - will greatly increase the price.

shoo 1y ago

I've heard a few economists interviewed about the estimated impact of tariffs, an argument is that tariffs should lead to higher prices for US consumers, but as a one-time price increase, not a sustained level of price inflation. That said, it's curious that this CPI news release highlighted "shelter" as a driver: > The index for shelter rose 0.4 percent in August and was the largest factor in the all items monthly increase. The US may import a lot of things... but probably not shelter. Wonder how much of rent inflation is driven by fixed rate mortgages from the zirp era needing to be refinanced at today's higher mortgage rates.

tlogan 1y ago
My naive expectation was: - Rents would go down because deportation of illegals will reduce demand - Prices of goods would skyrocket because of tariffs But instead, rents went way up. Could this be driven by the push to return to the office?
- Aurornis 1y ago
  > Rents would go down because deportation of illegals will reduce demand The number of people deported is negligible. Around 200,000 people. Despite all the news and drama, this number isn’t actually very different than normal. Any large country will have a steady stream of deportations if they enforce immigration laws. It has been like this for a long time. Don’t believe the news and political rhetoric. Look at numbers. Do no trust any political claims without looking at the numbers.
  - Yoric 1y ago
    As far as I can tell from a distance (I live in Europe), it seems to be more violent than usual, though. Is that correct?
    - Aurornis 1y ago
      They are trying to make a big show of it with the masks and big public events, yes. It’s all political drama and it’s very sad that it’s like this.

cj 1y ago

What is the target rate? Was under the impression that 2-3% is the target. Less than that is bad. More than that, also bad.

andxor 1y ago
The target is 2 percent. Persistent 3 percent inflation is a whole different planet.
- cosmicgadget 1y ago
  Ferenginar, after they abandoned the latinum standard.
etrautmann 1y ago
I am not an economist but would guess that three feels quite different from two.
altcognito 1y ago
2% was the target over the long haul (not 3%) -- BUT it is a dual mandate to keep unemployment to a minimum as well. This is considered on the high end of that part of the inflation mandate, and as another comment stated -- if it is persistent, it will be seen as a negative.
- cj 1y ago
  Compared to the past 12-24 months, 2.9% doesn't seem to be particularly worse than previous months. E.g. it was even higher at 3% at the beginning of the year and it has been at 2.7% for the past few months. Might not be at the 2% target, but at least looking at the graph, 2.9% isn't making me panic. Maybe the panic is warranted, I don't know. https://www.cnbc.com/2025/09/11/consumer-prices-rose-at-annual-rate-of-2point9percent-in-august-as-weekly-jobless-claims-jump.html#:~:text=target%20is%202%25.-,On%20employment,-%2C%20the%20Labor%20Department https://www.cnbc.com/2025/09/11/consumer-prices-rose-at-annu... Edit: Although maybe it does get more worrying if the hypothesis is that reducing rates will result in upward pressure on inflation. That could be worrisome.

jeffbee 1y ago

Federal outlays +8%. DOGE was a scam and you all fell for it.

esafak 1y ago
Musk was vocally against the increased federal spending.
- SR2Z 1y ago
  And yet he did not meaningfully reduce government spending with DOGE at all. He did pilfer a copy of the SSA database, though.
  - softwaredoug 1y ago
    And managed to neuter agencies regulating his companies
  - deleted 1y ago
    [deleted]
  - esafak 1y ago
    I don't think that was his intention, or that he feigned anger at the outcome.
throw0101d 1y ago
> DOGE was a scam and you all fell for it. Who is this "you" that you talk about? There were many folks talking about all the 'saving money' was just a veneer; a sampling: * http://archive.is/https://www.theatlantic.com/politics/archive/2025/05/musk-doge-spending-cuts/682736/ http://archive.is/https://www.theatlantic.com/politics/archi... * https://www.epi.org/blog/doge-is-not-worth-engaging-you-cant-cut-your-way-to-a-federal-government-that-does-more/ https://www.epi.org/blog/doge-is-not-worth-engaging-you-cant... * https://www.msnbc.com/katy-tur/watch/doge-isn-t-about-money-it-s-about-malice-and-punishing-members-of-the-deep-state-french-233001541850 https://www.msnbc.com/katy-tur/watch/doge-isn-t-about-money-... Even the libertarian Cato Institute: * https://www.cato.org/blog/six-ways-understand-doge-predict-its-future-behavior https://www.cato.org/blog/six-ways-understand-doge-predict-i... The hypothesis of an 'ideological purge' was fairly common.

m101 1y ago

12*0.4% is 4.8% Inflation is running at an annualised 4.8%. The 2.9% number is backward looking. Sure monthly inflation is more volatile, but the direction of travel is up, and that running average of 2.9% will be increasing slowly as it incorporates the recent higher prints. Edit: the seasonally adjusted change is 0.4% actually, with the monthly change 0.3%

jlongr 1y ago
You concede that monthly inflation is volatile but then proceed to assume it is has grown uniformly and speculate that it will continue to grow uniformly? Umm...
- UncleMeat 1y ago
  The point is that the annual number is often rather confusing from a reporting perspective.
  - m101 1y ago
    And that an annual number is diluted and will only feed in slowly over time. If we knew inflation was permanently at 5% from now on, a blend with 2% for 11 months and 5% for 1 month, is not informative.
    - jlongr 1y ago
      Pointless observation.
  - jlongr 1y ago
    They said: "12*0.4% is 4.8%. Inflation is running at an annualised 4.8%." This is patently wrong.
    - readthenotes1 1y ago
      Because it's 1.04^12? Or are you addressing some other flaw?

cs702 1y ago

The Fed's inflation target is a long-term stable 2% annual increase in prices of personal consumption expenditures (PCE): https://www.federalreserve.gov/economy-at-a-glance-inflation-pce.htm https://www.federalreserve.gov/economy-at-a-glance-inflation... The motivation for 2%/year is that when inflation is lower, businesses and consumers tend to hoard more cash, instead of spending or investing it, reducing economic activity, and when inflation is higher, it tends to become self-reinforcing and can spiral out of control: Businesses raise prices and employees demand higher pay to keep up with expected rising costs. Deflation (prices decreasing every year) is undesirable, because it forces businesses and consumers to spend and invest less, but no one ever wants to earn less (e.g., employees don't like pay cuts), so deflation tends to shrink economic activity even more, and in the worst case, can induce a depression, with businesses spending and investing less because consumers are spending less, and consumers, in turn, spending less because businesses are spending and investing less. I'm of course oversimplifying, to keep things short. Inflation remains above target, but thankfully, as of now, it doesn't appear to be self-reinforcing. I mean, I hope it isn't: https://news.ycombinator.com/item?id=45182111 https://news.ycombinator.com/item?id=45182111

skdjbd 1y ago
> The motivation for 2%/year is that when inflation is lower, businesses and consumers tend to hoard more cash, instead of spending or investing it, reducing economic activity That’s what they say. In reality, inflation is a permanent tax on those who earn money through labor. Every greenback they print makes 90% of us a little poorer, and conversely makes the capital holders richer. Popular economists should be thought of as a priestly class employed to enforce this order with explanations like the one you gave above. Defending a system that has resulted in an ever increasing wealth gap and the proliferation of businesses who optimize for accumulating capital is indefensible. There are other systems (https://en.m.wikipedia.org/wiki/Social_credit https://en.m.wikipedia.org/wiki/Social_credit). The economy should serve the people, not the elites. It’s hard to read a lot of economic discussion when the system is so fundamentally flawed. It’s not workable as is.
- MattPalmer1086 1y ago

mensetmanusman 1y ago

Energy raw materials decreasing, complexity of grid management capital and operation due to renewables intermittency increasing energy costs for consumers. Germany is ahead on these cost burdens.

thiago_fm 1y ago

FED is caught between a rock and a hard place, in a double bind. Because of jobs data, it will 100% cut interest rates in the next 2-3 FED meetings with inflation clearly showing an upwards trend. US could print money for over a decade because of China exporting deflation to it and the world, now that China is an enemy, it's up for a rude awakening. Monetary policies matter, the Dollar will suffer great debasement (it already is). Imagine how many dollars are in supply around the world, and now the world is quitting the dollar. There'll be too many dollars for too little demand. Fasten your seatbelts... The country will become industrialized for the wrong reasons -- by becoming poorer.

Workaccount2 1y ago
>The country will become industrialized for the wrong reasons -- by becoming poorer. Trump is a populist. That is the goal. The elite will get hammered and the bottom will be pulled up. The country will be net poorer, but the bottom will be higher than it was before. At least that's how the plan is sold on paper.
- thiago_fm 1y ago
  I can understand that, but both the elite and the bottom will be pulled down with the policy. As I've mentioned, industrialization will happen benefiting jobs for blue collars, but you'll have lots of inflation. And inflation hurts a lot the poor, as they have little to zero discretionary income. It's like a sales tax, it affects the poor more than the rich, proportional to how much they have available to spend. A country with lots of factories can't afford suburbs, F150s, houses (instead of small condos). I know this because I live in Germany, and we do have factories, but the life you can afford working in one of them is much more humble than a construction worker in the US can already right now. Americans will need to learn to live on cramped spaces and stuff that doesn't make sense, as they'll really hate it. There's no way the US government will have money to maintain all that suburban infrastructure, huge defense expenses without being high in the value chain.
- duxup 1y ago
  Trump is a populist in rhetoric only. I don't think his actions demonstrate he is a populist via policy. His excuses might be his rhetoric but his actions don't match.

sciencesama 1y ago

Does this mean the rates will fall ?

Workaccount2 1y ago

Interestingly treasury yields are down on this news, whereas on paper you would expect the opposite. Equities are up, on paper you would expect a toss-up (lower rate cut pushing down, inflation pushing up). Gold is down slightly. All this suggests these numbers, while being inflationary, are better then anticipated.

m101 1y ago
What is probably going on is the following: - if inflation picks up again it will have to be controlled - going by 1970s experience it may be that an engineered recession is required to bring inflation down - recession fears is risk-off - risk-off means go into bonds and out of stocks But yeah, inflation is a double edged sword on bonds. To some extent higher inflation expectations should mean that yields on bonds should go up to provide a consistent real return.
rsync 1y ago
You are correct that this is confusing… one of these markets, broadly speaking, is wrong. I think the bond market is betting on no rate cut and we are seeing early entrants into a larger flight to safety.

tlogan 1y ago

I got downvoted for asking this - but let me ask again: The key driver for inflation seems to rents (technically listed as "shelter"). Shelter has a large weight in the CPI basket, and its 12-month increase was 3.6% (comparing to 2.9%). Am I wrong here in reading the data? If I’m wrong please correct me. I assume the downvote is because I’m not correct.