Morning Report: Jerome Powell acknowledges progress on inflation.

Posted on July 16, 2024 by Brent Nyitray

Vital Statistics:

Stocks are higher this morning as earnings continue to come in. Bonds and MBS are up.

Jerome Powell spoke yesterday, and said that the Fed isn’t going to wait until inflation hits its 2% target before easing. “The implication of that is that if you wait until inflation gets all the way down to 2%, you’ve probably waited too long, because the tightening that you’re doing, or the level of tightness that you have, is still having effects which will probably drive inflation below 2%,” Powell said.

He also acknowledged the recent good inflation reports: “What increases that confidence in that is more good inflation data, and lately here we have been getting some of that,” he said.

The September Fed Funds futures now see a rate cut as a certainty.

Retail Sales were flat month-over-month in June, according to the Census Bureau. They rose 2.3% on a year-over-year basis. Since these numbers are not adjusted for inflation, real retail sales fell.

Non-store retailers (i.e. online shopping) and restaurants saw big increases. If you strip out motor vehicles, sales rose 0.4% MOM and if you exclude vehicles and gasoline, they rose 0.8%.

May’s retail sales numbers were revised upward.

When inflation rises, politicians invariably return to one of the dumbest ideas ever put forward – price caps. The idea is that we beat inflation by simply putting a ceiling on prices. Of course this has unintended consequences – the most common is that price controls create shortages – but those effects take time to play out, so it can often give a politician the veneer of “doing something” long enough to get through the election cycle before the unintended effects are visible.

I mention this because the Biden Administration wants to impose rent control nationwide, capping annual price increases at 5%. Of course since this doesn’t affect the costs that landlords bear, it will act to lower cap rates for multi-family developments, which will discourage investment.

Needless to say, industry groups oppose this. The MBA said “There are endless examples in localities in America and around the world that prove that rent control is a counter-productive policy idea that ultimately harms renters by distorting market pricing, discouraging new construction, and degrading the quality of rental housing. While the odds are stacked against this proposal ever passing Congress, a federal rent control law would be catastrophic to renters and our nation’s rental housing market. 

The measure requires Congressional approval, so has little-to-no chance of getting passed, let alone in an election year, but it does demonstrate yet again that bad ideas are like Freddy Kreuger – they keep coming back

Filed under: Economy |

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59 Responses

  1. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on July 16, 2024 at 8:48 am said:

    Won’t you think of these poor souls? It’s not their fault Trump was almost killed.

    https://x.com/politico/status/1813049274302677165?s=46&t=vSGsUlnc4rLxcUf7zfUiHg

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  2. jnc4p's avatar
    jnc4p, on July 16, 2024 at 10:44 am said:

    Re: The linked article on rent control.

    The plan, which is subject to congressional approval, has two parts. The first proposal calls for withdrawing tax credits from landlords who raise rent by more than 5% per year, beginning this year and for the next two years. The plan would apply only to larger landlords who have more than 50 units in their portfolio, though that counts for more than 20 million rental units across the country, according to the White House.

    They never go back and list the second part. Horrible writing.

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  3. jnc4p's avatar
    jnc4p, on July 16, 2024 at 11:10 am said:

    Good piece on the Trump classified documents ruling:

    One common criticism of Judge Cannon’s ruling is that she departed from 50-plus years of precedent going back to Watergate. That’s not only incorrect; it’s misleading. In a sense, history lends support to Cannon’s reasoning. Yes, we had independent counsels (as they were then called) back in the 1970s for Watergate and the 1990s for Bill Clinton — but those officers served in a position created by a specific statute, which expired in 1999. That, according to Cannon, is how this should work: If Congress passes a law, go ahead and pick an outside prosecutor; if not, then the attorney general can’t just invent and fill the position himself.

    https://nymag.com/intelligencer/article/judge-aileen-cannon-dismissal-trump-documents-case.html

    If progressives thought about this for a second, they would want this understanding in place for a second Trump term so that he couldn’t appoint special prosecutor outside of a statute authorizing it and without Senate confirmation. Otherwise, watch out for Special Prosecutor Rudy Giuliani.

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  4. jnc4p's avatar
    jnc4p, on July 16, 2024 at 12:34 pm said:

    Good piece on Vance’s record in the Senate.

    https://www.leefang.com/p/jd-vances-populist-anti-corporate

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  5. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on July 16, 2024 at 5:07 pm said:

    Absolute banger of a diary at DailyKos. Apparently Lester Holt is now a Man of the Right.

    https://www.dailykos.com/story/2024/7/16/2254642/-Really-Lester

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    • Brent Nyitray's avatar
      Brent Nyitray, on July 17, 2024 at 11:56 am said:

      I think in the 90s, Trumka diverted dues to electing democrats. Of course that doesn’t work in today’s day and age with open borders.

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  11. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on July 18, 2024 at 9:23 pm said:

    Suhweet Jeebus, this RNC convention is wild. First Hulk Hogan goes absolutley apeshit and now Kid Rock rapping American Bad Ass with 75 year old women throwing Crip and Blood gang signs! Insane!

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      • jnc4p's avatar
        jnc4p, on July 19, 2024 at 3:54 pm said:

        Thanks Mark. How are you doing?

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        • markinaustin's avatar
          markinaustin, on July 20, 2024 at 2:14 pm said:

          OK, waiting for an OK on my shoulder surgery. That will be my second dip into Medicare.

          As for current events, if the Ds do not dump Biden it seems to me they don’t really believe Trump is an “existential” threat.

          Rosanne is going to write me in if Biden stays in. I am younger than Biden, of course.

          .

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        • Let the mutherfuker burn!'s avatar
          Let the mutherfuker burn!, on July 20, 2024 at 3:36 pm said:

          Why should Biden leave, specifically? If it’s cognitive function, is there anybody in the party that didn’t know and cover for him? If not, how can they be trusted to be honest? If not, how plugged in to the party could they be?

          If it’s not for cognitive function, what is the reason to replace him?

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        • markinaustin's avatar
          markinaustin, on July 21, 2024 at 11:04 am said:

          George, I think “denial” must have run deep for his inner circle to have even thought he could handle a debate.

          This sort of senility creeps in a way that permits good days and bad – e.g.; he was “good” after the NATO conference. That’s how true believers [and family members] are enticed to pass off the increasing number of mumblefuck days as “one-offs”.

          He was also hidden from plain view pretty thoroughly in the last six months. So I am guessing that until very recently very few persons had evidence of his faltering acuity. And those few persons have continued to push Biden now to make more public appearances and do more fund raisers. Exposing him as they have done indicates that they are still in denial, but now everyone has seen enough, and what they are doing is now more like elder abuse. Instead of taking the car keys away they are sending him out on figurative joy rides.

          We read that JB is the one adamantly maintaining his nomination. He, of course, is the most likely person of all to be in denial. Who wants to admit that they are losing it?
          That his family and personal advisors won’t buck him is enabling him, in the pejorative sense AA uses the word.

          In short, I doubt that Congressmen and Senators were previously aware of his loss of function and I know that state party officials would have had no way of knowing. Presidents don’t communicate directly with the apparatchniks, in either party.
          I think we are talking about a small group, some of whom were probably bound by security considerations, and some of whom were bound by family ties, and some of whom were bound by fear of losing their jobs.

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        • markinaustin's avatar
          markinaustin, on July 23, 2024 at 6:43 am said:

          That WSJ article you posted says it more thoroughly than I was even guessing.

          So you’re welcome and thank you.

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        • ScottC's avatar
          ScottC, on July 20, 2024 at 4:15 pm said:

          mark:

          As for current events, if the Ds do not dump Biden it seems to me they don’t really believe Trump is an “existential” threat.

          If the D’s really believed Trump is an existential threat, they wouldn’t be condemning the attempt to kill him. They’d be condemning the failure to kill him.

          https://reasoninexile.substack.com/p/disingenuous-democrats

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        • markinaustin's avatar
          markinaustin, on July 21, 2024 at 11:15 am said:

          Maybe.

          I saw violent lefties and violent southern cops in the sixties and I saw violent Trumpies and violent lefties in recent years and I cannot imagine a serious elected official calling for violence – although some do. What goes around comes around.

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        • ScottC's avatar
          ScottC, on July 22, 2024 at 5:02 pm said:

          Mark:

          Of course they don’t call for it. But, again, if they truly believed their hyperbolic characterizations of Trump, they would welcome it.

          One way or another, they are obviously lying.

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    • Let the mutherfuker burn!'s avatar
      Let the mutherfuker burn!, on July 19, 2024 at 5:21 pm said:

      That piece gave me a raging hard on.

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    • Let the mutherfuker burn!'s avatar
      Let the mutherfuker burn!, on July 19, 2024 at 8:08 pm said:

      Why won’t Trump be a be an AWFL?

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  16. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on July 20, 2024 at 12:35 pm said:

    if this is true it demonstrates the Democrats belief in a deep state as well as their faith in it. POTUS is more ceremonial than Director. Policy emanates from the State, not necessarily the elected Executive.

    https://redstate.com/bonchie/2024/07/20/revealed-obama-lied-about-bidens-senility-at-infamous-fundraiser-story-has-completely-changed-n2177140

    Also, it’s hilarious the press is perfectly happy to be lied too.

    as long as it’s by the right people.

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  17. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on July 21, 2024 at 12:58 pm said:

    Biden stepping down.

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  18. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on July 22, 2024 at 12:12 pm said:

    What will be the official reason for Biden not seeking re-election?

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  20. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on July 22, 2024 at 6:26 pm said:

    Am I wrong to be stunned by this?

    Were the radio coms recorded then deleted or were they just not recorded?

    Why should I not believe that if not recording was made, that this was not a deliberate attempt to allow an assassination?

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  21. jnc4p's avatar
    jnc4p, on July 23, 2024 at 9:24 am said:

    Looking at the Washington Post’s home page photography and headline choices over the past few days, it’s impressive how shamelessly they have become an arm of the Harris 2024 campaign.

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    • markinaustin's avatar
      markinaustin, on July 23, 2024 at 2:43 pm said:

      This was necessary. I did not see the hearings and I had a question for her that may have been asked:

      How the hell did you let the nominee under your protection STAND UP right after he was shot at?

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      • ScottC's avatar
        ScottC, on July 23, 2024 at 6:58 pm said:

        Mark:

        I agree it was necessary.

        I will actually defend the Secret Service on the point you raise. If you watch the video with audio, you will see that they do not let Trump stand up until after there is confirmation that the shooter is down and neutralized. A bigger question for me is why they had three women who were half Trump’s height assigned to cover him as he left the stage.

        Of course it isn’t actually a question. We know the answer. DEI.

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        • markinaustin's avatar
          markinaustin, on July 24, 2024 at 8:04 am said:

          Well, that would be a decent explanation for not keeping him down.

          That they did not clear line of sight is of course the most egregious failing of all.

          I remember in September 1964 when another law student and I climbed to the top of a parking structure to watch LBJ [and a live concert] at 11th and Congress at the front of the Capitol in Austin. Shortly after we found a comfortable fourth level watch two Service agents, guns drawn, moved us unceremoniously downstairs. I think we were not arrested because my colleague in crime was an El Paso Police Lieutenant on leave of absence to attend law school.

          We did not know “the rule”. The post-JFK rule is that line of sight is to be thoroughly vetted and re-vetted before and during a protected appearance. I think it is right up there near #1.

          I get that Congress has been told of Service under-staffing for many years. Maybe now they will spend more, but even “under-staffed”, not clearing the sight lines was unforgivable.

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        • ScottC's avatar
          ScottC, on July 24, 2024 at 4:43 pm said:

          Mark:

          I get that Congress has been told of Service under-staffing for many years.

          The Secret Service annual budget is roughly $3bn. If they can’t find the staff to do the job, it isn’t congress’s fault.

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        • Let the mutherfuker burn!'s avatar
          Let the mutherfuker burn!, on July 24, 2024 at 4:51 pm said:

          How come there was not this failure when Trump was the Chief Executive?

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  24. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on July 23, 2024 at 2:51 pm said:

    Looks pretty insurrectiony.

    Lord, preserve our Republic!

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