{"id":772,"date":"2022-07-16T18:55:45","date_gmt":"2022-07-17T01:55:45","guid":{"rendered":"https:\/\/www.druryjournal.com\/?p=772"},"modified":"2022-07-16T19:09:32","modified_gmt":"2022-07-17T02:09:32","slug":"latest-news-on-inflation-could-be-encouraging","status":"publish","type":"post","link":"https:\/\/www.druryjournal.com\/?p=772","title":{"rendered":"Latest News on Inflation Could be Encouraging"},"content":{"rendered":"
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\n \t<\/i> Read Time:<\/span>1 Minute, 48 Second <\/div>\n\n <\/div>\n

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Late yesterday, the most recent University of Michigan’s 5-year inflation-expectations gauge was released. This particular metric depicts the US consumers’ prediction of the average inflation rate over the next 5 years. It came in at 2.8% for July – still higher than pre-pandemic (ranged from 2.2% to 2.6% from July 2017 through March of 2020) but lower than June’s final 3.1%. As you can see by the chart below, this is a significant drop and is the lowest number since July of 2021. Also, any revision to July’s 2.8% would not likely happen until after<\/strong> the Fed’s July rate decision, if it is revised at all.<\/p>\n\n\n\n

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This trend could be significant in predicting the Fed’s July rate hike, as multiple sources have stated that the initial June report is mainly what motivated the Fed to go outside the norm and hike rates by 100 basis points versus the initially planned 75-basis-point hike. Obviously, this new trend paints a much more optimistic picture, which could be sufficient to get a 100-basis-point hike off the table. It appears that such is what Wall Street reacted to via yesterday’s big rally despite it otherwise being a dismal week. I am not surprised by Wall Street’s favorable reaction because the Fed has taken the University of Michigan inflation expectation metrics seriously since the 1940s.<\/p>\n

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However, despite these and possibly some other tables turning toward a 75-basis-point increase, my bias remains toward 100 basis-points, simply because of the shocking June CPI of 9.1 versus May’s 8.6 CPI . As Jerome Powell stated himself, we must see a decided downward inflation trend before we should back off on aggressive money tightening. Although the prognosis might look more encouraging than it did a few days ago, we’re just not there yet in terms of actual realized inflation data. Please see my prior post<\/a> for more information on why I tend to favor 100 basis points. And please know that this is only my preference from my vantage point, not a prediction of what the Fed will actually decide to do come July 26.<\/p>\n

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Late yesterday, the most recent University of Michigan’s 5-year inflation-expectations gauge was released. This particular metric depicts the US consumers’ prediction of the average inflation rate over the next 5 years. It came in at 2.8% for July – still higher than pre-pandemic (ranged from 2.2% to 2.6% from July 2017 through March of 2020) […]<\/p>\n","protected":false},"author":1,"featured_media":790,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","advanced_seo_description":"","jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[16,85],"tags":[52,125,126,124,127],"class_list":["post-772","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finances","category-from-the-editor","tag-inflation","tag-inflation-expectation","tag-jerome-powell","tag-prediction","tag-university-of-michigan"],"jetpack_publicize_connections":[],"featured_image_urls":{"full":["https:\/\/i0.wp.com\/www.druryjournal.com\/wp-content\/uploads\/2022\/07\/inflation-man.png?fit=1200%2C628&ssl=1",1200,628,false],"thumbnail":["https:\/\/i0.wp.com\/www.druryjournal.com\/wp-content\/uploads\/2022\/07\/inflation-man.png?resize=150%2C150&ssl=1",150,150,true],"medium":["https:\/\/i0.wp.com\/www.druryjournal.com\/wp-content\/uploads\/2022\/07\/inflation-man.png?fit=300%2C157&ssl=1",300,157,true],"medium_large":["https:\/\/i0.wp.com\/www.druryjournal.com\/wp-content\/uploads\/2022\/07\/inflation-man.png?fit=768%2C402&ssl=1",768,402,true],"large":["https:\/\/i0.wp.com\/www.druryjournal.com\/wp-content\/uploads\/2022\/07\/inflation-man.png?fit=1024%2C536&ssl=1",1024,536,true],"1536x1536":["https:\/\/i0.wp.com\/www.druryjournal.com\/wp-content\/uploads\/2022\/07\/inflation-man.png?fit=1200%2C628&ssl=1",1200,628,true],"2048x2048":["https:\/\/i0.wp.com\/www.druryjournal.com\/wp-content\/uploads\/2022\/07\/inflation-man.png?fit=1200%2C628&ssl=1",1200,628,true],"pk-small":["https:\/\/i0.wp.com\/www.druryjournal.com\/wp-content\/uploads\/2022\/07\/inflation-man.png?resize=80%2C80&ssl=1",80,80,true],"pk-thumbnail":["https:\/\/i0.wp.com\/www.druryjournal.com\/wp-content\/uploads\/2022\/07\/inflation-man.png?resize=300%2C225&ssl=1",300,225,true],"bigbulletin-500-300":["https:\/\/i0.wp.com\/www.druryjournal.com\/wp-content\/uploads\/2022\/07\/inflation-man.png?resize=500%2C300&ssl=1",500,300,true]},"author_info":{"info":["The Editor"]},"category_info":"Finances<\/a> From the Editor<\/a>","tag_info":"From the Editor","comment_count":"0","jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.druryjournal.com\/wp-content\/uploads\/2022\/07\/inflation-man.png?fit=1200%2C628&ssl=1","jetpack-related-posts":[{"id":719,"url":"https:\/\/www.druryjournal.com\/?p=719","url_meta":{"origin":772,"position":0},"title":"How much should the Fed raise interest rates in July?","date":"July 16, 2022","format":false,"excerpt":"Background I\u2019m sure most of us are extremely disappointed, if not stunned, by the June 9.1% CPI.\u00a0 Although way, way too high, at least it was fairly stable for the past three months (8.6% in March, 8.3% in April, and 8.6% May), thereby showing signs of peaking - until now.\u00a0\u2026","rel":"","context":"In "Finances"","img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.druryjournal.com\/wp-content\/uploads\/2022\/07\/jerome-Powell-Edit.png?fit=1200%2C628&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":2269,"url":"https:\/\/www.druryjournal.com\/?p=2269","url_meta":{"origin":772,"position":1},"title":"Was the Feds latest Interest Rate Move the Right Thing to Do?\u00a0 And Some Q & A","date":"September 28, 2022","format":false,"excerpt":"First off, like many, I am fully convinced the Fed should have acted sooner \u2013 more like 4Q20\/1Q21 versus mid-2022 \u2013 in raising interest rates and Quantitative Tightening (QT), or at least stopped the Quantitative Easing (QE). Had they done that, my speculation is that inflation would have stayed below\u2026","rel":"","context":"In "From the Editor"","img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.druryjournal.com\/wp-content\/uploads\/2022\/09\/inflation-post.png?fit=1024%2C683&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1169,"url":"https:\/\/www.druryjournal.com\/?p=1169","url_meta":{"origin":772,"position":2},"title":"How To Fight Climate Change and Inflation at the Same Time","date":"July 31, 2022","format":false,"excerpt":"We all know (or should know) that energy prices are a key inflation driver, just as they were in the 70s and 80s.\u00a0 Hence, any attempt to cut fossil fuel supply would be counterproductive to inflation, as such would only drive energy prices higher.We also know that we need to\u2026","rel":"","context":"In "From the Editor"","img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.druryjournal.com\/wp-content\/uploads\/2022\/07\/solar-pannel.png?fit=1200%2C628&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":289,"url":"https:\/\/www.druryjournal.com\/?p=289","url_meta":{"origin":772,"position":3},"title":"Why Is Inflation So High and When Will It Subside?","date":"June 11, 2022","format":false,"excerpt":"There has been a lot of discussion and handwringing on this subject lately.\u00a0 The Reuters article in the link below captured Janet Yellen\u2019s assertion that inflation is here to stay, at least for some time.\u00a0 I\u2019m not sold on this as an absolute reality, and I believe we can change\u2026","rel":"","context":"In "Finances"","img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.druryjournal.com\/wp-content\/uploads\/2022\/06\/10-Year-CPI-Data-May-2022.png?fit=1200%2C661&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1758,"url":"https:\/\/www.druryjournal.com\/?p=1758","url_meta":{"origin":772,"position":4},"title":"Why a Short-Term Boost to Oil and Gas Production is Needed and Why It’s Actually Good For The Environment","date":"August 20, 2022","format":false,"excerpt":"I believe a recent Business Insider article via Yahoo News sums this topic up well for the short term.\u00a0 However, I believe it lacks the long-term foresight that should illustrate how we could\/should eventually ramp down oil and gas production as clean energy comes online to the point that it\u2026","rel":"","context":"In "Finances"","img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.druryjournal.com\/wp-content\/uploads\/2022\/08\/jpmorgan.png?fit=1200%2C628&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":648,"url":"https:\/\/www.druryjournal.com\/?p=648","url_meta":{"origin":772,"position":5},"title":"Worldwide Food Shortage Coming in 2022 – No More Chickenjoy?","date":"July 11, 2022","format":false,"excerpt":"With the continuous rise of inflation and the threat of recession, food shortages in some parts of the world are happening, and it is very alarming. With hyperinflation, rising commodity prices, and extensive debt in some countries, some economic sectors are greatly affected and have become paralyzed due to the\u2026","rel":"","context":"In "International"","img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.druryjournal.com\/wp-content\/uploads\/2022\/07\/meat-featured.png?fit=1200%2C628&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]}],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.druryjournal.com\/index.php?rest_route=\/wp\/v2\/posts\/772","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.druryjournal.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.druryjournal.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.druryjournal.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.druryjournal.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=772"}],"version-history":[{"count":16,"href":"https:\/\/www.druryjournal.com\/index.php?rest_route=\/wp\/v2\/posts\/772\/revisions"}],"predecessor-version":[{"id":789,"href":"https:\/\/www.druryjournal.com\/index.php?rest_route=\/wp\/v2\/posts\/772\/revisions\/789"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.druryjournal.com\/index.php?rest_route=\/wp\/v2\/media\/790"}],"wp:attachment":[{"href":"https:\/\/www.druryjournal.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=772"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.druryjournal.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=772"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.druryjournal.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=772"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}