Morning Report: Some encouraging news on inflation

Posted on August 26, 2022 by Brent Nyitray

Vital Statistics:

 LastChange
S&P futures4,2011.27
Oil (WTI)91.97-0.48
10 year government bond yield 3.05%
30 year fixed rate mortgage 5.73%

Stocks are flat as we await Jerome Powell’s speech at Jackson Hole. Bonds and MBS are up.

Personal Incomes rose 0.2% MOM in July, which was a dramatic slowdown from the 0.7% recorded in June. Personal consumption expenditures fell from 1% to 0.1%.

Finally, the PCE Price Index (which is the Fed’s preferred measure of inflation) fell 0.1% on a MOM basis. Ex-food and energy, it was up 0.1%. This suggests that we have turned the corner on inflation, however the Fed will need to see a string of these before it takes its foot off the brakes. On a YOY basis, the PCE Price Index rose 6.3% on the headline number and 4.6% ex-food and energy.

Blackstone-backed Home Partners of America is stopping purchases of homes in 38 cities and will add more in October. This is the latest sign than institutional investors are getting nervous about the torrid home price appreciation we have seen over the past several years.

Consumers are beginning to improve their mood, according to the University of Michigan Consumer Sentiment Index. The improvement was largely due to better expectations for the economy going forward. Most notably, expectations for year-ahead inflation fell to 4.8%, the lowest in 8 months. The Fed pays close attention to this number.

Filed under: Economy |

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56 Responses

    • Kevin S. Willis, on August 26, 2022 at 9:56 pm said:

      I mean (a) they shouldn’t have been trafficking the diary, IMO. I get it but I also see the legal objections.
      (b) anyone who thinks anybody would have gotten in any trouble for trafficking a Trump kid’s diary is smoking crack. So yeah the double-standard can just be taken as a given at this point.

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  2. Let the mutherfuker burn!, on August 26, 2022 at 11:33 am said:

    I’m with J in the Burn it All Down camp but at least we can be entertained while it happens.

    We’re so fucked. I have zero expectation that elected Republicans will do anything about this if they win a majority- hell, they all agree with this.

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  7. jnc4p, on August 27, 2022 at 10:54 am said:

    Actual good piece in the Atlantic.

    “A Democratic Economist’s Case Against Biden’s Student-Loan Plan

    Jason Furman, a former Obama economic adviser, thinks Biden’s debt-relief plan helps too many of the wrong people.

    By Annie Lowrey”

    https://www.theatlantic.com/ideas/archive/2022/08/an-economists-case-against-biden-student-loan-forgiveness-plan/671259/

    I had forgotten this:

    “Finally, I’m uncomfortable with this level of presidential power. You know, President Trump was being pushed by some of his advisers to index capital-gains tax rates to inflation, and do it by executive order. He ultimately resisted. I think the indexation of capital gains is a much worse policy than this one. And it’s possible the legal grounds were weaker. But he actually said, No. I’m not going to just change tax law by myself without checking with Congress. I think that’s a good rule to live by, and one we’ve mostly had up until now.”

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    • Brent Nyitray, on August 28, 2022 at 10:32 am said:

      We’re all MMT-ers now.

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      • Let the mutherfuker burn!, on August 28, 2022 at 10:53 am said:

        Brent, curious what you think the interest rate will have to be before it starts taking a real bite out of tax revenue collected? We’ve been on a huge borrowing binge based on very low interest rates but at some point it’s going to consume a significant portion of the budget, right?

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        • Brent Nyitray, on August 28, 2022 at 2:12 pm said:

          IMO it won’t be about interest rates – it will be about China. The Chinese buy Treasuries to finance their trade surplus. As long as China is more interested in exporting than the return they get on Treasuries they will continue to buy them.

          Eventually China will become richer and per-capital GDP will rise enough that Chinese consumption of imports will rise. When that happens, interest rates will rise.

          Interestingly, Japan has a way bigger debt-to-GDP ratio than us, and their interest rates (and Germany’s too) have been negative for years at a time.

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  8. ScottC, on August 27, 2022 at 10:57 am said:

    Bill Barr continues to be the most reasonable and rational voice in DC:

    “And my view is, I’m going to support whoever has the best chance of pushing Trump aside…”

    … Still, Barr said that if Trump were to secure the 2024 Republican presidential nomination and run against a progressive Democrat, he’ll cast his ballot for Trump. Barr said progressivism is the greatest threat currently facing America.

    https://www.dailywire.com/news/bill-barr-predicts-the-next-president-and-describes-being-called-a-fing-loser-by-trump

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    • Let the mutherfuker burn!, on August 27, 2022 at 11:36 am said:

      I get it but what if the person that is best able (most likely?) to oust Trump is less likely to defeat the Democrat nominee?

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      • Kevin S. Willis, on August 27, 2022 at 12:32 pm said:

        Then it is what it is. There’s no way to know that for sure ahead of time. Ain’t up to anybody but the collective electorate, anyway.

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      • ScottC, on August 28, 2022 at 11:23 am said:

        McWing:

        I get it but what if the person that is best able (most likely?) to oust Trump is less likely to defeat the Democrat nominee?

        If I thought that Trump was the only possible nominee that could beat any Democrat, then I would support Trump. Stopping the march of progressivism is the overriding goal for me. I really don’t think the danger in modern progressive ideas can be overstated.

        But I don’t think Trump is the only candidate who can beat the Democrats. In fact, at least at this early stage, I think the opposite is closer to reality…Trump is the one potential R who will make the D’s more competitive than they otherwise would be.

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    • Kevin S. Willis, on August 27, 2022 at 12:33 pm said:

      I agree with Barr. And will be doing the same thing. I don’t want to vote for Trump but if he wins the nomination, I’m voting for Trump.

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  9. Let the mutherfuker burn!, on August 27, 2022 at 2:48 pm said:

    Totally!

    https://m.dailykos.com/stories/2022/8/27/2119157/-Intelligence-agencies-concerned-that-Trump-has-been-leaking-information-on-U-S-spies-overseas

    Plus, he stole actual nuclear missiles, brought them to Mar a Lago and then sold them to foreign agents. I shit you not!!

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  10. Let the mutherfuker burn!, on August 27, 2022 at 3:43 pm said:

    Mean tweets are now acceptable.

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  11. Let the mutherfuker burn!, on August 27, 2022 at 4:07 pm said:

    Seriously, I didn’t think it could get more awesome!

    https://m.dailykos.com/stories/2022/8/27/2119143/-The-New-York-Times-Drops-A-100-Megaton-Print-Bomb-On-One-Donald-J-Trump

    Also, and this is news to me, Progressives love the CIA!

    It’s been over 4 hours so imma need to see a doctor.

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    • Kevin S. Willis, on August 27, 2022 at 8:43 pm said:

      It would be awesome if there was a Twilight Zone episode where you got one wish and you wished DailyKos was a woman.

      Of course after you were done with her and she turned back into a website it would be all pro-American and libertarian because you would have ruined her for everybody else.

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    • Kevin S. Willis, on August 27, 2022 at 8:52 pm said:

      No mention of who could be leaking sensitive secrets. While obviously it wouldn’t be the anti-Trump folks in the bureaucracy that leaked like a sieve during the Trump presidency … what about Eric Swallwell and Fang-Fang? The known Chinese spy who was the chauffeur for … Diane Feinstein if I recall. Other Chinese nationals who have made their way into the us government because we’re so diverse?

      Nah!

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    • ScottC, on August 28, 2022 at 11:26 am said:

      McWing:

      It’s been over 4 hours so imma need to see a doctor.

      Lol

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  12. jnc4p, on August 28, 2022 at 10:13 am said:

    Anyone else started receiving E-mail notifications for comment updates? Just started for me and I’m trying to figure out if I accidentally changed a setting.

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  13. ScottC, on August 28, 2022 at 2:01 pm said:

    Kinzinger is an idiot.

    “And if you have Republicans that are running against even left-wing Democrats that believe in democracy and believe in voting, that person should be elected over somebody who would basically overthrow the will of the people and, ultimately, destroy this country.”

    https://www.dailywire.com/news/adam-kinzinger-says-hell-back-far-left-dems-over-anti-democracy-republicans

    There are no elected Democrats – left-wing or otherwise – that believe in democracy or in voting. They only believe in policy outcomes, and they will support whatever is required for them to achieve the policy outcomes they desire. This is fairly easy to demonstrate…simply ask them what their position is on Roe and Obergefell.

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    • Brent Nyitray, on August 28, 2022 at 7:25 pm said:

      There are no elected Democrats – left-wing or otherwise – that believe in democracy or in voting.

      Exactly. They perform their dirty work through the distinctly non-democratic bureaucracy and courts.

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      • Kevin S. Willis, on August 28, 2022 at 8:57 pm said:

        Democracy exists to elect experts on how everything should be run, and then they implement their expert vision with no additional input from the governed required. Anything that prevents them from working their will is therefore un-democratic.

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    • Kevin S. Willis, on August 28, 2022 at 8:53 pm said:

      I think most of them also define democracy as legitimate only if they get their way. If they don’t get their way, that is clear evidence that the so-called “democratic” result was in fact illegitimate.

      So they feel, most of the rank and file, that they do believe in democracy. And that if they lose, it’s clear evidence of anti-democratic forces depriving them of their rightful democratic victory.

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      • ScottC, on August 29, 2022 at 6:54 am said:

        KW:

        I think most of them also define democracy as legitimate only if they get their way.

        I don’t think most of them ever even think about what democracy actually means. They use the term more as a sacred symbol for “government doing good things”. Hence they will say the most nonsensical things, like that overturning Roe is a “threat to democracy”, and they can’t even grasp what an absurdity that statement is.

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        • Brent Nyitray, on August 29, 2022 at 9:52 am said:

          The left operates from an emotional, not a logical place.

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        • Kevin S. Willis, on August 29, 2022 at 8:11 pm said:

          That mystifies me. But it’s also the kind of objection they only raise when not getting their way. They will literally complain about 9 unelected judges taking away their rights but when they like it that they are magicking up extra-legal rights or impinging on, say, rights to property or stuff they don’t mind taking away rights, it’s virtuous.

          Democracy is just another newspeak redefinition for the left generally: a way of describing them winning their political battles by any means necessary.

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  14. Let the mutherfuker burn!, on August 28, 2022 at 7:30 pm said:

    Fuckin’ A

    I’m so fucking MAGA I want to Nuke it from orbit!

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    • Brent Nyitray, on August 28, 2022 at 7:32 pm said:

      MAGA Republicans don’t want to destroy the country. They want to destroy the left.

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      • Kevin S. Willis, on August 28, 2022 at 8:47 pm said:

        That is such a retarded thing to say. Nobody want to destroy the country … outside of radical Islamists. MAGA types want to save it from the left, more broadly conservatives generally want to preserve it, the left wants to improve it or remake it into utopia (they are just incompetent, as this Tweet proves).

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        • ScottC, on August 29, 2022 at 6:28 am said:

          KW:

          Nobody want to destroy the country … outside of radical Islamists.

          I actually very much disagree with this. The explicit point of “critical theories”, whether it is race theory, gender theory, whatever, is to challenge the legitimacy of, and to tear down, existing power structures and hierarchies. And that includes both government and culture. This is the underlying message, for example, of the incessant charges of “systemic” and “structural” racism, and the concept of “White privilege”. Their entire point is that racism is inextricably baked into the system, and so the system itself needs to be destroyed in order to eliminate racism. Why do you suppose the thesis pushed by the 1619 Project was the absurd notion that America was founded in order to preserve and perpetuate slavery? So as to delegitimize the very idea of America, that’s why.

          Now, it is surely true that most Democrats or Democrat-voting, self-styled “moderates” do not consciously embrace this nonsense, and if you put it directly to them they would object to it. But since they find it difficult to believe that anyone really does want to destroy the country, they have convinced themselves (and have been manipulated into believing) that what is really intended by these critical theories is entirely benign, unobjectionable stuff. If you talk to everyday liberals about the introduction of gender ideology and critical race theory into grade schools and ask them what they think about it (and I have made a concerted effort to do exactly that) they will dismiss it as nothing more than an anti-bullying message teaching kids not to discriminate…and what’s wrong with that?!? Maybe a teacher here or there goes too far, but surely those are just anomalies.

          This is why I find Democrats so objectionable. It isn’t that they want to destroy the country, but they have embraced the sugar-coated ideas of people who do. They are, in a very real sense, Lenin’s modern day useful idiots.

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        • Kevin S. Willis, on August 29, 2022 at 8:25 pm said:

          I don’t think they want to destroy the country in the manner radical Islamists do.

          They actually like being wealthy, almost all the output of the country is stuff they like (obviously they don’t like it’s accessibility to the rabble but they’ll take care of that). I think they mostly believe all the productive output of the country can decoupled from all the dirty capitalism and middle-class labor and nasty market forces with the right progressive policy prescriptions.

          Essentially I don’t think they want to destroy America as they understand it—they want to steal it, control it, perfect it.

          This will of course destroy America to a degree Imperial Japan could never dream of, but I don’t think they actually want the electric grid to fail or the stores to be empty or to be unable to find contractors to add rooms on to their luxury estates. For the vast majority of them the 1619 project is a religious incantation—-fundamentally morally true, yes, but not a reason to destroy America, but more of an excuse to find who is the most guilty and deprive them of relevance and agency. To steal the American car and drive it around, in essence.

          I’m sure there are some lunatics who would love to see America burn for its own sake. But for most I think it’s a matter of necessary pain in order to own the country for themselves, lock stock and barrel.

          Also that most of the burning they see happens in low-income or at best middle-class areas so it doesn’t matter.

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        • jnc4p, on August 29, 2022 at 10:57 am said:

          I’d say that falls into “remaking the country”.

          Now what they do explicitly want to replace is the US Constitution. They are quite open about.

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        • ScottC, on August 29, 2022 at 12:21 pm said:

          Ace linked to this thread yesterday about how difficult it is to explain to people what the hard left is up to, because it makes the one doing the explaining sound insane.

          Some interesting comments. My favorite was this:

          Most non-woke leftists also have a weird mental filter that automatically translates the insane claims into much more reasonable ones. Hence the frequent riposte that “no one believes that”.

          So very true.

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        • Kevin S. Willis, on August 29, 2022 at 8:30 pm said:

          Sure. Anything that is an obstacle to attainment of Utopia is bad and should be dispensed with.

          Besides, they are much smarter and morally pure than a bunch of old dead white men. They could write a truly just and equitable constitution.

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    • ScottC, on August 29, 2022 at 6:35 am said:

      I wonder if this is an example of what Mark meant when he said that it is the Presidents job to speak to all Americans as Americans, even those who hate him.

      If only Trump would have been this civil to his opposition!

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