The conclusion from the end of the article. I think hard monies equals gold and T-bills but not sure
The prior four decades are unlikely to be a good dataset for back-testing and forming strategies that will work for next four decades, because the conditions will likely be quite different.
Additionally, hard monies become a serious alternative once again in this context, and are worth serious consideration for a portfolio slice, because the hurdle rate for stocks to outperform them is high when there are not a lot of tailwinds at the backs of stocks.
German commentary on the various anti-China trade policies in place currently and being proposed.
The dismantling of globalisation and the break-up of the world into adversarial trading blocks will be the most expensive thing anyone has ever done. I am saying that without qualification. The opportunity costs of the new cold war will run in the tens of trillions of dollars. Its bill in the form of lower productivity growth, less public investment, more defence spending, more inequality, a weakening of multilateral institutions, and of democracy itself. Be careful what you wish for.
California’s wage law doesn’t apply to establishments with less than 60 national locations, so smaller, independent restaurants aren’t impacted by the higher labor costs.
As a result, some customers are turning to small neighborhood businesses for lower prices.
Seth Amitin, a 39-year-old therapist based in Los Angeles, told The Journal he saw his usual $16 meal that he picks up once a week at a Chick-fil-A in Hollywood get hiked up to $20.
“There’s a really good taco spot just down the street. They kept their burrito prices at $10. I’m definitely eating there more often,” Amitin said.
However, a spokesman for California Gov. Gavin Newsom told The Journal fast food chains can afford to give their workers a raise.
Americans have tipping fatigue. Domino’s thinks it has the answer
Americans are being asked to tip on digital screens for everything from a cup of coffee to self-checkout at grocery stores, and many are frustrated with the new tipping culture.
Pizza chain Domino’s aims to tap into that exasperation. Not by eliminating tips, however. Instead, Domino’s is encouraging tipping even more.
Domino’s launched a promotion that rewards customers with $3 off a future online delivery order for every $3 or more they tip a Domino’s delivery driver. Domino’s “You Tip, We Tip” deal runs through mid-September.
“At Domino’s, we know there’s a lot of pressure to tip these days,” a narrator says in a cheeky new commercial showing people being asked to tip at the grocery store, gym and even a wedding. “Domino’s wants to say ‘thanks for the tip’ by tipping you back.”
FEDERAL RESERVE LEAVES KEY OVERNIGHT INTEREST RATE UNCHANGED IN 5.25-5.50% RANGE
FED: INFLATION HAS EASED OVER THE PAST YEAR BUT REMAINS ELEVATED
SAYS RECENTLY THERE HAS BEEN LACK OF FURTHER PROGRESS TOWARD 2% INFLATION
FED DOES NOT EXPECT IT WILL BE APPROPRIATE TO CUT RATES UNTIL IT HAS GAINED GREATER CONFIDENCE INFLATION IS MOVING SUSTAINABLY TOWARD 2%
FED WILL SLOW DECLINE OF BALANCE SHEET BY CUTTING TREASURY REDEMPTION CAP TO $25 BLN PER MONTH FROM $60 BLN STARTING JUNE 1
FED MAINTAINS MORTGAGE-BACKED SECURITIES REDEMPTION CAP AT $35 BLN PER MONTH, WILL REINVEST EXCESS MBS PRINCIPAL PAYMENTS INTO TREASURIES
FED: ECONOMIC ACTIVITY CONTINUES TO EXPAND AT SOLID PACE, JOB GAINS HAVE REMAINED STRONG, UNEMPLOYMENT RATE HAS REMAINED LOW
fed commentary
POWELL: INFLATION DATA RECEIVED THIS YEAR HAVE BEEN HIGHER THAN EXPECTED
POWELL: FED OFFICIALS ARE ‘ACUTELY AWARE’ OF HARDSHIPS POSED BY HIGH INFLATION
FED’S POWELL: LONGER TERM INFLATION EXPECTATIONS REMAIN WELL ANCHORED
POWELL: FURTHER PROGRESS ON INFLATION NOT ASSURED; PATH UNCERTAIN
POWELL: WE ARE HIGHLY ATTENTIVE TO INFLATION RISKS
FED’S POWELL: THE LABOR MARKET REMAINS RELATIVELY TIGHT.
FED’S POWELL: RESTRICTIVE STANCE HAS PUT DOWNWARD PRESSURE IN INFLATION AND ECONOMY.
FED’S POWELL: IT IS LIKELY THAT GAINING GREATER CONFIDENCE WILL TAKE LONGER THAN PREVIOUSLY EXPECTED.
FED’S POWELL: SO FAR THIS YEAR INFLATION READINGS HAVE NOT GIVEN US THAT GREATER CONFIDENCE.
FED’S POWELL: WE BELIEVE OVER TIME POLICY IS SUFFICIENTLY RESTRICTIVE TO BRING INFLATION BACK DOWN TO 2%.
POWELL: UNLIKELY NEXT POLICY MOVE WILL BE A HIKE
FED’S POWELL: IF INFLATION PROVES MORE PERSISTENT AND LABOR MARKET REMAINS STRONG, THEN IT COULD BE APPROPRIATE TO HOLD OFF ON RATE CUTS.
FED’S POWELL: BUT THERE ARE OTHER PATHS WHICH WOULD POINT TO RATE CUTS, BUT THAT WOULD BE IF WE GAIN GREATER CONFIDENCE AND UNEXPECTED WEAKENING IN LABOR MARKET.
market response
SHORT-TERM INTEREST-RATE FUTURES RISE AS CHAIR POWELL SPEAKS
TRADERS SEE FED RATE CUT MOST LIKELY IN NOVEMBER
TRADERS REDUCE BETS THAT THE FED WILL NOT CUT RATES AT ALL THIS YEAR, AND ADD TO BETS FIRST RATE CUT COMES IN SEPTEMBER.
I think this is doing something. It wasn’t a shock but slowing down the effective demonetization of the debt I think is a big deal as owning such a huge pile of treasuries isn’t something that the Fed is supposed to be doing anyway. I thought the Fed was supposed to be doing short term rate manipulation not continuing to own trillions of dollars of treasuries. I guess I should be happy the cap went down by only a little more than half.
Can someone ELI5 this to me? Does it mean they’ll be buying $35B/mo more than they were before (they let $60B roll off the balance sheet before, but now it’ll be $25B, meaning $35B will be bought as it matures)? Which means this additional buying will create downward pressure on the interest rates of the treasuries they buy. I think they buy them across all the maturities, so this should slightly decrease rates on all treasuries. Right?
Yeah, they will be buying $35B a month more now. The $60B roll off becomes $25B. The $35B of MBS is in play too since anything above that goes to buy treasuries too. Powel made it sound not significant but I am not sure since they still put in that rule for a reason. The New York Fed has a 2023 Open Market Operations report that I linked and quoted below. In 2023 they bought on a basic, simply worded rule (see below, I don’t pretend to understand it), and they buy at auction. This should reduce rates on all of the yield curve but to what extent I don’t know. The vast majority is in bills but they roll over the most and have the most volume. There is a nice chart on page 17 showing the amounts of each maturity purchased. Page 15 shows how lumpy the buying was last year (there is a bit of variation month to month of what was above the caps). Note that they are buying everything but it is still funny to me to see them buy some TIPS with money they injected into the economy.
The Desk reinvested a total of $860.5 billion of maturing
Treasury securities during 2023, compared to $1.49 trillion in
2022. Reinvestments consisted of $656.5 billion in Treasury bills
and $203.9 billion in Treasury coupons (Chart 6). A total of
$720.0 billion in Treasury securities were redeemed, comprising
$647.3 billion in Treasury coupons and $72.7 billion in Treasury
bills
To reinvest maturing Treasury securities the Desk places
noncompetitive bids at Treasury auctions. Maturing Treasury
bills were reinvested into newly issued bills, while coupons were
reinvested into newly issued coupons. Maturing amounts were
apportioned on a pro rata basis according to the issuance
amounts of securities that settled on the matching maturity
date.14 The noncompetitive bids by the Desk at auctions for
Treasury securities are treated as add-ons to announced
auctions sizes.
14 Specifically, on mid-month maturity dates, the Desk reinvested
maturing Treasury coupon securities into newly issued three-,
ten-, and thirty-year Treasury securities. End-of-month
maturing Treasury securities were reinvested into newly issued
two-, five-, seven-, and twenty-year, floating rate, and inflationlinked Treasury securities.
ETA:
Looks like MBS really is nothing, not sure why they have the cap.
AGENCY MBS OPERATIONS
The FOMC continued to direct the Desk to reinvest principal
payments of agency MBS only to the extent that they exceeded a
monthly cap of $35 billion, in accordance with its Plans for
Reducing the Size of the Federal Reserve’s Balance Sheet. During
2023, principal paydowns on SOMA holdings of agency MBS did
not exceed the cap in any month and no agency MBS operations
were conducted by the Desk outside of small-value exercises for
the purpose of operational readiness.
Even in a negative sum game, it may matter to the proponents of such de-globalization moves whether the split of these costs is asymmetric in their favor.
In other words, if everyone takes a GDP hit but your opponents take an abnormally large hit compared to you, this may be worth it. At least I could follow the decision if it were framed in that context.
Inflation during Biden term. In California, we have had more inflation on some items, such as eggs. Probably due to California’s “pamper chickens” regulations.
Note the source mentioned in big red letters. You have to check everything it returns, because based on what I’ve read it hallucinates a lot more than other AI.
Also I don’t EVER recall seeing a dozen eggs for $1.49. I don’t think I’ve ever seen it for less than $4.49.
I’m sorry, I forgot that I buy them in 24-packs (Costco), so I guess $2.25/dozen would be the lowest I recall. Personally I only buy organic, and those have been around $3.50/dozen (except during a COVID spike). I always look at the prices of regular, since they’re next to each other and I want to know how much I’m getting fleeced by the organic lobby.
Come on, @xerty, this isn’t facebook, don’t spread bullshit propaganda here. What do presidents have to do with food price inflation? Or inflation in general? We know full well it was caused mostly (if not entirely) by bipartisan COVID spending during both administrations.
Trillion dollar new spending budgets even after we come out of Covid sure isn’t helping on the inflation front, ie. The Inflation Reduction Act, which from the title we know definitely causes inflation.
It’s not food price inflation specifically, just tons of government debt-backed spending results in more dollars and hence higher prices for commodities, labor, etc, and consequently most prices. The focus on food is just trying to sound good to poorer voters who are getting squeezed by the higher living costs.
Here’s the democrats like Warren with their usual shtick - the solution to problems of government intervention is even more government intervention.
Always someone else’s fault in politics as usual. Cannot possibly be fiscal policy. When you know the razor-thin grocery store margins, this is guaranteed a waste of time and money. But politicians must keep looking busy doing something even if it’s chasing mirages.
Beside this circus from both sides, shelter is 36% of the CPI adjustment and in March 2024 that was nearly 6%. If you looked at total contribution to the CPI adjustment in March, more than half of the 3.5% CPI was due to housing. How about everyone in charge focuses on the current greatest contributor to inflation rather than trying to score bleeeping PR points.
Last I heard (on an econ podcast a couple days ago) most of that money hasn’t been spent yet, so I doubt it’s causing anything.
There IS price-fixing going on in the grocery sector according to another econ pod – the big agro companies raised prices across the board not because their inputs had gone up in price, but because they could conveniently blame it on inflation. The problem as I understand it isn’t grocery stores, but grocery producers.
