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Inflation falls 0.1% in June from prior month, helping case for lower rates


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WWW.CNBC.COM

The monthly inflation rate dipped for the first time in more than four years, providing further cover for the Fed to start lowering rates later this year.

 

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This was the first time since May 2020 that the monthly rate showed a decrease.

 

Excluding volatile food and energy costs, so-called core CPI increased 0.1% monthly and 3.3% from a year ago, compared with respective forecasts for 0.2% and 3.4%, according to the report from the Bureau of Labor Statistics.

 

The annual increase for the core rate was the smallest since April 2021.

 

A 3.8% slide in gasoline prices held back inflation for the month, offsetting 0.2% increases in both food prices and shelter. Housing-related costs have been one of the most stubborn components of inflation and make up about one-third of the weighting in the CPI, so a pullback in the rate of increase is another positive sign.

 

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I'm no expert, but I feel like the government needs to do something to make buying one home for one family way way easier and cheaper while also finding a way to make buying a bunch of homes as rentals or Airbnbs much more expensive. Companies buying up homes and individuals buying up homes should be massively disincentivized.

 

Flipping houses should also be massively disincentivized. Make some sort of massive tax penalty for anyone owning multiple houses who doesn't hold onto them for more than 3 years (or whatever time span seems reasonable.)

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9 minutes ago, ort said:

I'm no expert, but I feel like the government needs to do something to make buying one home for one family way way easier and cheaper while also finding a way to make buying a bunch of homes as rentals or Airbnbs much more expensive. Companies buying up homes and individuals buying up homes should be massively disincentivized.

 

Flipping houses should also be massively disincentivized. Make some sort of massive tax penalty for anyone owning multiple houses who doesn't hold onto them for more than 3 years (or whatever time span seems reasonable.)

 

None of those companies are buying enough housing to get a stranglehold on the market. The problem is nowhere in this country is building enough new housing. And these companies say right in their prospectuses that the reason they're a good investment is that they expect the severe undersupply of new housing to continue indefinitely, which means indefinite outsized returns. 

 

Also, the Netherlands tried this and it didn't do anything to the sale price of housing, but rents went up 4% due to fewer units hitting the market. 

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Speaking of lower rates...

 

WWW.CNBC.COM

The probabilities are based on trading in CME Fed Funds futures contracts.

 

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Traders are now 100% certain the Federal Reserve will cut interest rates by September.

 

There are now 93.3% odds that the Fed’s target range for the federal funds rate, its key rate, will be lowered by a quarter percentage point to 5% to 5.25% in September from the current 5.25% to 5.5%, according to the CME FedWatch tool. And there are 6.7% odds that the rate will be a half percentage point lower in September, accounting for some traders believing the Fed will cut at its meeting at the end of July and again in September, says the tool. Taken together, you get the 100% odds.

 

The catalyst for the change in odds was the consumer price index update for June last week, which showed a 0.1% decrease from the prior month. That put the annual inflation rate at 3%, the lowest in three years. Odds that rates would be cut in September were about 70% a month ago.

 

The CME FedWatch Tool computes the probabilities based on trading in fed funds futures contracts at the exchange, where traders are placing their bets on the level of the effective fed funds rate in 30-day increments. Simply put, this is a reflection of where traders are putting their money. Actual real life probability of rates remaining where they are today in September are not zero percent, but what this means is that no traders out there are willing to put actual money on the line to bet on that.

 

 

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12 hours ago, Commissar SFLUFAN said:

Speaking of lower rates...

 

WWW.CNBC.COM

The probabilities are based on trading in CME Fed Funds futures contracts.

 

 

Like I posted in an earlier thread, Biden can't make up the ground he's lost via campaign charisma--he's not magically going make himself 20 years younger and more telegenic--but he can win this thing by catching a few lucky breaks.  This being one of them.

 

I think falling interest rates really takes the air out of the GOP's 'the economy is a disaster!' messaging.  It's easier to square that message with an economy that has low unemployment and decent wage growth when inflation is high and mortgage rates and rent are eating up your discretionary income.  The cognitive dissonance gets harder to sustain when it's becoming easier to afford housing and rents are declining all around you--at least for 'normie' voters.

 

So, cross your fingers they decide to go through with this.  Then double-cross them and hope for some positive developments in the Gaza situation.  That might win Biden the election--cause he certainly won't be winning it with spellbinding oratory, dashing good looks or flawless debate performances.  And no one voted for him on account of that shit anyway.

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Just now, Signifyin(g)Monkey said:

Like I posted in an earlier thread, Biden can't make up the ground he's lost via campaign charisma--he's not magically going make himself 20 years younger and more telegenic--but he can win this thing by catching a few lucky breaks.  This being one of them.

 

I think falling interest rates really takes the air out of the GOP's 'the economy is a disaster!' messaging.  It's easier to square that message with an economy that has low unemployment and decent wage growth when inflation is high and mortgage rates and rent are eating up your discretionary income.  The cognitive dissonance gets harder to sustain when it's becoming easier to afford housing and rents are declining all around you--at least for 'normie' voters.

 

So, cross your fingers they decide to go through with this.  Then double-cross them and hope for some positive developments in the Gaza situation.  That might win Biden the election--cause he certainly won't be winning it with spellbinding oratory, dashing good looks or flawless debate performances.

 

Don't forget they should also push on abortion and Project 2025 stuff as well. 

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37 minutes ago, Signifyin(g)Monkey said:

Like I posted in an earlier thread, Biden can't make up the ground he's lost via campaign charisma--he's not magically going make himself 20 years younger and more telegenic--but he can win this thing by catching a few lucky breaks.  This being one of them.

 

I think falling interest rates really takes the air out of the GOP's 'the economy is a disaster!' messaging.  It's easier to square that message with an economy that has low unemployment and decent wage growth when inflation is high and mortgage rates and rent are eating up your discretionary income.  The cognitive dissonance gets harder to sustain when it's becoming easier to afford housing and rents are declining all around you--at least for 'normie' voters.

 

So, cross your fingers they decide to go through with this.  Then double-cross them and hope for some positive developments in the Gaza situation.  That might win Biden the election--cause he certainly won't be winning it with spellbinding oratory, dashing good looks or flawless debate performances.  And no one voted for him on account of that shit anyway.

No one fucking cares about Gaza wrt the election

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Both Trump and Biden tag-teaming to do a number on semiconductor stock today.

 

WWW.CNBC.COM

Global chip stocks fell sharply with ASML, Nvidia and TSMC hit amid reports of tighter export restrictions from the U.S. and comments from Donald Trump.

 

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Global chip stocks fell sharply, with ASML, Nvidia and TSMC posting declines amid reports of tighter export restrictions from the U.S. and a ramp-up of geopolitical tensions fueled by comments from former U.S. President Donald Trump.

 

The moves came after Bloomberg on Wednesday reported that the Biden administration is considering a wide-sweeping rule to clamp down on companies exporting their critical chipmaking equipment to China.

 

Washington’s foreign direct product rule, or FDPR, allows the U.S. to put controls on foreign-made products even if they use the smallest amount of American technology. This can affect non-U.S. companies.

 

CNBC has reached out to the U.S. State Department, the Bureau of Industry and Security, and the Office of the U.S. Trade Representative for comment on the report.

 

 

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Comments from Trump, a Republican, added further negative sentiment to semiconductor stocks.

 

The former president said Taiwan should pay the U.S. for defense, in an interview with Bloomberg Businessweek published Tuesday. He also claimed Taiwan took “about 100%” of America’s semiconductor business.

 

The remarks have thrown doubt over the U.S. commitment to defend Taiwan if Trump becomes president and in the event of an attack by China, which sees the democratically governed island as part of its territory.

 

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1 hour ago, Commissar SFLUFAN said:

The remarks have thrown doubt over the U.S. commitment to defend Taiwan if Trump becomes president and in the event of an attack by China

 

lol how did anyone still think Trump would honor our alliance commitments prior to this one statement in an infinitely long string of statements making it clear he won't?

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12 hours ago, Jason said:

 

Arab American and especially Palestinian American people in Michigan do, yes 

Call me crazy but there’s nothing that could possibly happen in the next 4 months in Gaza that could affect the political trajectory of this country

 

unless Biden gets blown up by the IDF idk

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On 7/17/2024 at 6:39 PM, Commissar SFLUFAN said:

Both Trump and Biden tag-teaming to do a number on semiconductor stock today.

 

WWW.CNBC.COM

Global chip stocks fell sharply with ASML, Nvidia and TSMC hit amid reports of tighter export restrictions from the U.S. and comments from Donald Trump.

 

 

 

This has been hitting for a week now (tech performance) huge hit today. Looks tempting, but can we go lower!

 

 

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WWW.BLOOMBERG.COM
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I’ve long been in the “higher for longer” camp, insisting that the US Federal Reserve must hold short-term interest rates at the current level or higher to get inflation under control.

The facts have changed, so I’ve changed my mind. The Fed should cut, preferably at next week’s policy-making meeting.

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So much for that case for lower rates...

 

WWW.CNBC.COM

Gross domestic product in the second quarter was expected to show a 2.1% annualized increase.

 

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Economic activity in the U.S. was considerably stronger than expected during the second quarter, according to an initial estimate Thursday from the Commerce Department.

 

Real gross domestic product, a measure of all the goods and services produced during the April-through-June period, increased at a 2.8% annualized pace adjusted for seasonality and inflation. Economists surveyed by Dow Jones had been looking for growth of 2.1% following a 1.4% increase in the first quarter.

 

Consumer spending helped propel the growth number higher, as did contributions from private inventory investment and nonresidential fixed investment.

 

Personal consumption expenditures, the main proxy in the Bureau of Economic Analysis report for consumer activity, increased 2.3% for the quarter, up from the 1.5% acceleration in Q1. Both services and goods spending saw solid increases for the quarter.

 

 

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2 minutes ago, CitizenVectron said:

Interesting. Canada just cut by 0.25%.

 

Not at all surprising considering that Canada's GDP growth in the first quarter came in significantly lower than expected (1.7% actual vs 2.2% (analyst expectations)/2.8% (Bank of Canada expectations).

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