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0% Inflation!

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On 12/13/2022 at 2:33 PM, grandjean87 said:

I have not looked for any current 2nd derivative data.  Fuel costs' impacts are important, but they are industry specific.  Some consumer spending categories not much at all affected.  I don't think fuel costs impact high value/low bulk stuff much, but general transportation can be 10%+% and some industries higher. I think for air travel it can be like 25%?  So, the YoY graph showing that big rise in air fare makes sense.  

The +70% (YoY fuel) certainly is a derivative factor for core inflation just as falling fuel prices MoM recently have done for those metrics. 

this is the answer i needed

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On 12/14/2022 at 12:58 PM, Maji said:

my opinion of him has declined

I'm watching the WC rather than the post-hike presser.

There's a good debate out there.  Prof. Siegel is one out front saying the Fed is late to see inflation is gone.   Then there is the lesson of the '70s and the unprecedented U.S. global monetary stimulus combined w/a sticky labor force.  Fear of not killing inflation for sure is the tilt for now. 

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Interesting article on young people living at home. I understand the reasons. But a few issues I see as a mortgage guy are: 

It’s very important for each generation to buy homes. Plenty of data that shows owning a home as a young person improves their stability, confidence, success and community involvement.  Less young people buying homes leaves big holes for investment companies to gobble up the market with zero pride of ownership. 

And excess spending rather than asset building which is crucial at a young age.

The current Fed actions are designed to slow down the housing market and many potential young homeowners were already priced out of the market but I hope these aren’t long term solutions for kids because parents aren’t pushing them out of the nest to contribute to society. 
 

https://finance.yahoo.com/amphtml/news/nearly-half-young-adults-us-073044507.html

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On 1/12/2023 at 12:51 PM, Maji said:

wasn't my prediction though! still nice to see

You were at least leaning in that direction. 

I'm not expecting the Fed to pause or even go to a 0.25 raise next, and the balance sheet contraction will continue.  The Fed is committed to killing the possibility of Hydra-like inflation.  They'll need more and longer data to change direction. 

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On 1/12/2023 at 12:56 PM, grandjean87 said:

You were at least leaning in that direction. 

I'm not expecting the Fed to pause or even go to a 0.25 raise next, and the balance sheet contraction will continue.  The Fed is committed to killing the possibility of Hydra-like inflation.  They'll need more and longer data to change direction. 

I've been worried that their response will go too far and lag the situation, but the economy has been pretty resilient thus far. Seems like the Q4 GDP print will be solid. That, plus the labor market & wage growth holding up, probably emboldens them

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On 1/12/2023 at 3:05 PM, Maji said:

I've been worried that their response will go too far and lag the situation, but the economy has been pretty resilient thus far. Seems like the Q4 GDP print will be solid. That, plus the labor market & wage growth holding up, probably emboldens them

Student loan repayment starts either 2 months after the debt forgiveness is decided or the end of August (60 days after June 30, so Aug 29 I guess?). 

Over the course of the fed trying to beat inflation, it seems like that fact has slipped their mind. There's going to be a less money in the economy at that point. Probably one of the bigger unheralded causes of the economic recovery and by extension inflation. Something like 10-15 billion a month? Call it 500 billion of just... forgotten payments by the end point? 

Remember that every argument you have with someone on MWCboard is actually the continuation of a different argument they had with someone else also on MWCboard. 

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On 12/14/2022 at 11:10 PM, utenation said:

Interesting article on young people living at home. I understand the reasons. But a few issues I see as a mortgage guy are: 

It’s very important for each generation to buy homes. Plenty of data that shows owning a home as a young person improves their stability, confidence, success and community involvement.  Less young people buying homes leaves big holes for investment companies to gobble up the market with zero pride of ownership. 

And excess spending rather than asset building which is crucial at a young age.

The current Fed actions are designed to slow down the housing market and many potential young homeowners were already priced out of the market but I hope these aren’t long term solutions for kids because parents aren’t pushing them out of the nest to contribute to society. 
 

https://finance.yahoo.com/amphtml/news/nearly-half-young-adults-us-073044507.html

I really think this kind of misses the point. Well, at least from my perspective in CA. Parents can push all they want, but if their kid can’t afford a mortgage then what difference does it make how hard they “push them”?

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On 12/13/2022 at 9:31 AM, grandjean87 said:

I never got into Hedberg or Bill Hicks and way too young for Lenny Bruce.  Timing on Hedberg and just missed Hicks.  Sam Kinison was the one early death stand up comic that I really watched.  All different, but who am I missing w/o cheating and looking up? 

Richard Pryor tried to have an early death.

While not an early death,  Dick Gregory.

My mom had a couple of his albums when I was in Grade School.

 

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"We don't have evidence but, we have lot's of theories."

Americans Mayor

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On 2/16/2023 at 9:55 AM, bornontheblue said:

The Fed is going to go back to  .5 or .75 increases. 

It doesn't feel like it.  They have the balance sheet unwinding going on and M2 has contracted/leveled.  Monetary policy lags have effects still in the pipeline.  Then things like this (below) make it seem like .25 in March, again likely in May, and hold for longer (maybe)?  Another .25 June raise is on the table so I now hear, and futures are now pointing to higher, longer.  

The Fed wants to kill inflation, but it's a circus-like balancing act.  

 

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