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  • US consumers haven’t felt this bad about the economy since November

    From cnn.com

    Consumer sentiment plunged to the lowest level in six months as price increases reaccelerated, according to the latest University of Michigan survey of consumers, released Friday. Additionally, consumers are bracing for even higher price increases in the year ahead compared to readings from prior months, the survey found. The gauge, which is closely tracked by the Biden administration, plunged 13% from April’s 77.2% reading to 67.4%. However, that’s still a better reading than last May, when inflation was running at 4%, versus the latest reading of 3.5%. Even though inflation is lower compared to a year ago, ... (full story)

  •  Guest
  • | IP XX.XXX.132.184
I don't think anyone who has even the slightest idea about what is going on is surprised.

Also, no... Fed will not hike interest rates. Forget about it... rate cuts are coming soon.
  •  Guest
  • | IP XX.XXX.132.184
Quoting Vancarbon
Yes , the Crd medicine isn’t working as planned for the consumer. They’re trying to keep the markets sweet but their narrative pushes commodities higher adding to inflationary pressures. What a conundrum you’ve made for yourselves. Maybe just tell the markets no rate cuts- period or we raise rates
They engineered what was thought highly unlikely at the time... stagflation environment. Rate just high enough to bring the economy down and just low enough not to take care of inflation. Amazing job by the Fed.
And "transitional" was after all not that transitional or what do you say Ms Yellen?
Amazing job by the Fed, really? Explain it deeper?
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Quoting Guest
{quote} They engineered what was thought highly unlikely at the time... stagflation environment. Rate just high enough to bring the economy down and just low enough not to take care of inflation. Amazing job by the Fed.
In retrospect they should have crushed inflation with another 200bps of rate hikes, so maybe a 7.5% rate. That would have crushed inflation, hurt the economy in the short term, but opened a path to gradual recovery. By not being decisive they’ve allowed consumer debt to accumulate to astronomical levels, savings to evaporate, and force inflation into purgatory. Keeping rates the same longer will only cause more slow-burn pain and raising rates now would absolutely crater this economy, cause massive unrest and significantly tilt election odds. This is a total lose-lose.
  •  Guest
  • | IP XXX.XXX.130.255
Quoting Vancarbon
{quote} Yes , amazing shit show . No rate cuts , how can they justify it . Log on and I’ll respect your opinion more.
They can sing this song about not cutting rates, but only until the song finishes which should be soon which can be seen already due to how certain markets are doing at the moment.

The only reason why the Fed has to stay playing the game longer than for example SNB, BOE or ECB is because everything is denominated in USD. Once USD starts to crack (when Fed starts cutting interest rates (not against trash fiat currencies, but everything else)), then the price of everything will literally go crazy.

Fed by not cutting rates is still exerting pressure on the markets thus not allowing inflation to skyrocket, however the economy is going down rapidly and it won't last long until Fed will have to start cutting rates whether they like it or not.

I don't think choosing a depression (even higher for longer or hiking rates) is an option for the Fed nor will the US government allow that to happen unless they want a revolution in the US.
Well, noteworthy is that todays sentiment is still better than a year ago. Also: note that this is the result of less than 1000 phone interviews or web surveys - no other opinion survey with this reach would consider that's even a good start...
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  •  Guest
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Quoting Guest
{quote}In retrospect they should have crushed inflation with another 200bps of rate hikes, so maybe a 7.5% rate. That would have crushed inflation, hurt the economy in the short term, but opened a path to gradual recovery. By not being decisive they’ve allowed consumer debt to accumulate to astronomical levels, savings to evaporate, and force inflation into purgatory. Keeping rates the same longer will only cause more slow-burn pain and raising rates now would absolutely crater this economy, cause massive unrest and significantly tilt election odds....
Exactly... now, it's on us to figure out what triumphs in a stagflation environment.

Hint: this part of the market already started a super-cycle. While one already broke the record highs, the other is still completely undervalued, but... it'll only stay that way until Fed gives in and starts lowering rates. It may already be unwise to wait for the inevitable to happen and not to get in while the price is still historically low (ridiculous).
Quoting Guest
{quote} Exactly... now, it's on us to figure out what triumphs in a stagflation environment. Hint: this part of the market already started a super-cycle. While one already broke the record highs, the other is still completely undervalued, but... it'll only stay that way until Fed gives in and starts lowering rates. It may already be unwise to wait for the inevitable to happen and not to get in while the price is still historically low (ridiculous).
Which market are you referring to as ridiculously low?
I trade gold. I've asked chatgbt to explain this article to me. Maybe this information will help someone.

This article discusses a recent University of Michigan survey indicating a significant drop in consumer sentiment due to increasing inflation, leading to concerns about the economy's future. The rise in inflation expectations, driven by factors like the avian bird flu and geopolitical tensions, has businesses adjusting prices accordingly. This sentiment shift could impact consumer spending and contribute to stagflation—a scenario where inflation rises while economic growth slows. Additionally, consumers are delaying big purchases like homes due to expected increases in mortgage rates. Rising delinquency rates on expenses further compound economic worries. These factors collectively could influence gold prices, as investors may turn to gold as a hedge against economic uncertainty and inflation.
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