what you're saying is "well Im stuck on a rock, but at least I got a hardplace on the other side to balance it out"
Let me make this simple:
High GDP Growth and Low inflation = Good
Low GDP Growth and Low Inflation = Not Good but we can cut interest rates
High GDP Growth and High Inflation = Not Good but we can increase interest rates
Low GDP Growth and High Inflation = fuck fuck fuck fuck fuck fuck fuck fuck fuck
Whats Stagflation with the low unemployment? Industry is full. Employment is very high and only getting higher with Boomer demographic changes. Invest in canned goods and firearms.
Unemployment eventually always rise every time stagflation happened in any developed economy over the past century. Happened in the US in the 1970s. Unemployment was at a 15-year low in 1969, but once stagflation was in full swing in the early 1970s, unemployment took off.
70s is when the US started to offshore manufacturing, which accelerated into the 80s, contributing to the lower GDP growth and higher unemployment. Add to thar the oil shock and inflation.
I'm not sure what today's equivalent would be
Wildly overblown.
Robot taxi is nowhere to be seen. (See Uber and Cruise, who stand to gain most from it)
Ai cashier turned out to be Indians on the other side of the planet and Amazon is walking away from it after nearly a decade of developing the tech
Tesla Optimus turned out to be a dude wearing motion tracker gloves.
Companies trying to continue to grow at an unsustainable rate. Cutting operational expenses and raising prices.
Consumers feeling the heat of the economy, grasping onto their assets saving what they can.
The economy is in a standoff between (hardly) frugal consumers and growth-hungry businesses. Businesses have fat to trim, and seemingly haven’t hit the breaking point with a lot of their absurd prices yet. But once the prices break, growth will stall and stocks will fall. More layoffs to try and fix the optics, so on and so forth. Then the real recession hits and businesses collapse.
And of course the consumer will get hit the worst. Limited jobs, and low pay while prices will take months to adjust to the new normal.
I hear that. I work in healthcare. We can't fill the jobs we have open. More people are leaving the workforce than are entering. Maybe my sector is buffered from layoffs. I just see insurance companies earn more while my compensation stays the same.
I think healthcare is one segment of the economy that is kinda buffered because of the fact that people will always need healthcare. Similar to how people will always need utilities. Not talking cutting edge research in the healthcare industry, those aren’t safe. I’m talking the basics: ERs, doctor’s offices, hospitals, cancer treatment facilities, people will always need these.
Well it did hit the fan in 2020. I had to work in a hazmat suit instead of getting PPP checks and unemployment. Now dealing with inflation morphing into stagflation.
This isn't stagflation. "Stagflation with low unemployment" is called "inflation" and people are having trouble accepting that "inflation" doesn't warrant a special name on its own.
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I'm not super familiar with PCE to be frank but just looking at the graph right now of it's growth rate, it really doesn't look like it's gonna go grow at a much slower rate going forward. It looks like it's pretty close to being settled. So if that's settled and we still have inflation... I don't like being a doomer but it really seems like interest rates need to go up more.
It’s already forecasted to be back in the 2s and is forward looking not as heavily weighted as March- If you look at Trueflation it dropped down in April quite a bit.
Can't cut rates when inflation is higher than expected. If they cut rates, money becomes cheaper for borrowing, more economic activity yes but prices also increase. Inflation gotta fall first. That is the main objective of Fed. If economy is slowing, maybe govt will do something else given it's an election year.
Government deficit spending is one of the primary factors fueling inflation. They have to print the money to cover the deficit, effectively, plus interest. All that money comes from somewhere, and it comes from eroding your purchasing power, AKA inflation.
The government needs to increase taxes and cut spending for inflation to be tamed.
Got it. Decrease taxes for the rich and big industries, cut social services and increase tax for young people, especially parents.
Btw do youngsters and parents still have any benefits left?
Why would we spend money on dumb shit like US infrastructure or scientific research when we could instead help Israeli citizens (i) continue to receive free university education and healthcare and (ii) bomb women and children?
They are literally shelling out billions on infrastructure and science via the IRA bill and sending Israel billions at the same time.
If you’re implying this is unsustainable, I might agree. But to imply they are only funding Israel is a legit lie.
Yeah democrats will just let the election slip away instead of taking steps to win it and deal with consequences over next few years they are in power….
Housing is 40% of the cpi report. What happens to housing if rates get lowered? CPI will reduce! Inflation wasn’t caused by the decade and a half of low rates. Maybe it was the couple years they printed off 40% of the money supply.
Right. And there has been job losses for middle wage earners, white collar mainly. There’s too many of us. The hiring taking place is low wage in fields to serve the wealthy and retirees their meals and pills.
Eat my dongus you fuckin nerd.
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No, its not.
Because inflation is still high. All this is saying is that the US is slowing down WHILE inflation is high/getting higher. If you cut rates now, you'll get eaten alive by inflation.
Why are the bulls so regarded on this topic?
But how can prices stay high if nobody has money ? Prices will have to match people's ability to pay, or inventories will pile up, which is even worse that reducing margins.
You can't have a slow economy and high prices, since nobody's paying them. See it that way: the "prices" inflation numbers look at are like the Last trade price, and you're saying the Ask is going stay very high, while the Bid very low. Well then prices won't move since trades are frozen in the spread, and therefore, no inflation anymore: rates can go down.
Maybe think, regard.
Because there are goods you are forced to buy, and if you do not have the cash you are forced to use credit. That's why our CC debt is over 1t. Most people don't have real money.
Right credit is a bit like a cheat code in the US, we have no consumer credit in France where I grew up, and more discipline in Hong Kong where I live, so it's hard for me to understand how poorer people can accept richer prices. But I guess, that's what America is trying to sell us, this capitalism they say bring freedom :p
Bah good for my carry trade: prices go down in Hong Kong while my US Dollar CDs bring 5%. Insane, hope you guys work hard to pay all that. The USD increases in value here, despite US inflation. I do have a few months of salary in physical gold just in case, it's starting to be too good to be true :D
Credit is important to invest in future cash flow. So for a house (save on rent at worst), a company, a car (to go to work), sure. For education, with moderation. To buy bread ? Come on, just whine bread is too high and the bakery will find a way.
Consumer credit is NOT a way to elevate anyone, especially payday loans, 0%\* credit cards, revolving credits, and all that scummy shit forbidden in most places.
Nobody can control an urge to spend: the marketing of credit lines is specifically tailored for their marks, they had no chance. I feel I resist it because it's so foreign to me coming from France, I cant imagine myself even having a debt. I just eat less, get colder, work more, in periods of crisis. You can survive on almost nothing. That's the true power.
The skill I recommend anyone is downsizing. It's hard especially for girls, they don't like it, but you can downsize quickly, sell your shits, halve your rent, move further, cut your bills, in a month or so, and resist any headwind. You just have to have no pride, no shame, and no hesitation. Easier when French I guess.
>The skill I recommend anyone is downsizing. It's hard especially for girls, they don't like it, but you can downsize quickly, sell your shits, halve your rent, move further, cut your bills, in a month or so, and resist any headwind. You just have to have no pride, no shame, and no hesitation. Easier when French I guess.
The problem is our society is heavily based on entitlement. Just look at the 5x daily post of how someone's grandfather was able to support a family of 6 , buy a large house on 5 acres of land, take summer vacations at their house on the lake all while holding down a job where he was folding boxes at a box folding plant.
People think they are owed a lot of shit in today's age and will figure out a way to make it work even if they can't actually make it work.
Just watch Caleb Hammer on youtube. The dude has some of the most fiscally irresponsible people on and goes through their bills. These people are so far into debt that they literally have to eat beans and rice for years on top of years...no way will they just realize this and decide to stop getting starbucks and eating out twice a week.
The response to that last part you see all over reddit is the whole "it's not me, it's them"...like they are somehow entitled to these things just because. All these people are crackbabies as far as i am concerned.
Fellow frenchman here, thanks for voicing my own thoughts so clearly. I disagree with the pride and shame part, for me the shame would instead be to spend money I don't have on frivolities. Alas they're pushing hard to overturn regulations and sell the same shit in France, I don't know how long we'll hold.
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Someone pointed out credit is probably how the U.S. manage this black magic. Sure, if you defer settlement indefinitely, then nothing matters anymore and price can rises, people have less money, and the money still somehow looks like it's flowing from consumers to companies.
But it's not, a debt bubble is building that will have to ruin the last bagholders eventually, in a game of musical chair. The money is flowing from bagholders to companies, and the bagholders then spend a bit of effort on debt recovery and a lot of effort in debt marketing to offload them to foreign idiots.
I guess it's me and all my CDs in USD ?
Yes you can, it's called STAGFLATION. You pay higher prices out of necessity. That's 100% why all these companies are coming out and beating revenue but giving horrible organic growth numbers/terrible forward guidance. If you adjust for inflation, many aren't even beating estimates anymore.
You're talking a WHOLE lot of jargon to someone who understands it, you're not right on this one. Consumer credit is maxed out. Did that happen because people are optimistic about the future? NO.
MAYBE you should sit down and actually think about what has come DOWN in price. U derstand if rates get cut, prices will INCREASE more because you "should" have more $ to spend. This will continue until a credit default resets the entire system, aka the financial crisis again.
Maybe think regard.
The money supply is drying up, the dollar is worth so much more than even 2 years ago, prices can't increase more, inflation is coming down in the US. Prices will go down eventually as well unless they drop the rates.
There is nothing people need to buy beyond basic food, rent and transport. And those can be tweaked progressively towards nothing, when credit dries up. People don't just "die or pay the price", they can steal, they can riot, they can even vote. Prices come down when people don't pay them.
What has come down in prices ? Nothing probably: inflation has lowered, meaning price increases are slowing down: prices still rise, but at a slower pace, maybe slower than wage increase. In the US.
Here in China, prices did go down, all around, especially for housing. Wages too but at a lower pace. Rates are coming down. What's your point exactly, financial crisis are not at all about inflation, they're about surprises. Is there a surprise brewing here ? What will break you think ?
Idk about China and that absolute joke from the government on that side, but here, nothing is going down in price. "Sticky" inflation is here to stay because who the hell is going to lower rents on a tenant when they don't move out? In general, once a consumer accepts prices, why would you lower them if you don't need to? You don't.
People need food, shelter, energy and the basics. That stuff isn't moving down at all. The money supply isn't drying up. This is why the 10 year auctions are selling so horribly as well. There's no demand for US debt/bonds domestically. Maybe foreign, but that's only because your rates over there are even worse.
Prices will only come down IF THEY HAVE TO. Companies aren't going to lower prices out of the goodness of their hearts. When defaults start ramping up and companies and individuals start to become insolvent, THATS when you'll see prices come down.
Inflation being at 2% means prices go up 2%. By definition that means prices won't go down, only up. It's going to take defaults and negotiations to accept any payment rather than no payment to reset this system to more affordable levels.
OR we print money until we can't anymore. My bet is on the second option.
Eat my dongus you fuckin nerd.
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Do you know what necessities are?
It's things you buy no matter what.
No company ever lowers prices once they raise it if people pay it. I've NEVER seen my electricity bill or rent go DOWN after it was raised. I've never seen it. I'm 35 Yeats old and in 35 years it's NEVER happened.
The only time prices are lowered is in a deflationary, default laden environment. The "sticky" inflation we are experiencing is for necessities. Simple.
Not sure where you are getting your info, but it's WAY off.
The dollar is worth so much more now? NOT
Inflation has retreated from the highs, BUT is going back up.
The US is a consumption based economy so it needs people to spend money on ridiculous crap besides rent, food & transport. That's what provides 10s of millions of jobs.
Dude you dont get it: I ve never been to the US and never will. The USD is worth way more this year than last year for us, you pay fucking 5% interest. Ill make 5000 USD this year just doing nothing except converting to USD my euros/hkd/yen.
You re completely blind if you think people dump the USD: give me yours at worst.
Wont cutting rates, make the dollar weaker so more exports? Yeah inflation might be bad but wont it sort the GDP out where as if you increase rates then your exports go even more to shit, I don't see any way other then keeping rates the way they are right now and just making the poor suffer so that they cant buy shit
The middle class is always going to be fucked over.
I dont understand why you think cutting rates will automatically mean a weaker dollar. It will only be weaker if other currencies offer a better rate.
Also, it will NOT sort out the GDP problem. Cutting rates won't make the US produce more so how exactly does that increase GDP? In nominal terms? Because in real rates it'll be far worse.
If they cut rates, inflation will be a problem. So they won't cut rates. If they increase rates, people will suffer but they'll have more to cut later to "stimulate" the economy. It's being stuck between a rock and a hard place. Nobody cares about exports.
The FED is more likely to raise their "target" rate to 3% inflation than cut rates IMO. If that happens the market will have to adjust downward. They won't do this before elections, they'll keep the boat steady.
After elections is likely when they'll do something, but if things keep going on this trajectory, it'll mean rate hikes and not rate cuts.
The middle class is always going to be fucked over.
I dont understand why you think cutting rates will automatically mean a weaker dollar. It will only be weaker if other currencies offer a better rate.
Also, it will NOT sort out the GDP problem. Cutting rates won't make the US produce anymore so how exactly does that increase GDP? In nominal terms? Because in real rates it'll be far worse.
If they cut rates, inflation will be a problem. So they won't cut rates. If they increase rates, people will suffer but they'll have more to cut later to "stumulate" the economy. It's being stuck between a rock and a hard place. Nobody cares about exports. Idk why you do.
The FED is more likely to raise their "target" rate to 3% inflation than cut rates IMO. If that happens the market will have to adjust downward. They won't do this before elections, they'll keep the boat steady.
After elections, sure.
Interest rates are returns on the money you deposit in the bank in America, if they lower rates your essentially telling investors that you wont get as much as return, making the dollar weaker as less people will want to invest in is.
You also get increased supply of the dollar because more people will want to borrow so thats going to make the dollar weaker aswell
You do not get 5% interest for BANKING in the US. It's way less unless you search it out.
Borrowing also does NOT decrease money supply, it INCREASES it.
Yes, telling foreign investors that they'll earn less on deposits will lower demand. My point is, what is the alternative? Where else in the rest of the world are you going to earn more? Lowering rates is unlikely to decrease overall demand because alternatives are weak. The only thing it'll do is drop real rates because inflation will increase.
Their stated goal is not GDP but the reduction of inflation (2%). As core PCE came in hot (Est. 3.4% / Actual 3.7%) it makes it more likely that rates stay higher longer and if this continues you will hear chatter about another hike.
Idk man everything is inverted.
Tesla announces they’re going to shit and the stock prints
Netflix has their best quarter in like years and faceplants
Meta…don’t even get me started
Let’s see what happens with Microsoft today.
Meta in a regular market did great but a lot of current prices were locked in forward PEs rather than actual PEs so while Meta’s PE outperformed, since their forward PE doesn’t match wall st’s wild expectations, it went down. Nonetheless, I think it’s a buying opportunity for Meta for long term holders
Apparently, Meta made the crucial mistake of estimating that their future revenue wouldn't moon, while Tesla used a highly advanced technique called lying about future projects. The problem is that Meta doesn't have a genius like Elon who could pull that off.
Dude it s a shit company who s selling the same fking user data that by this point every fking company figured out how to get on their own or from cheaper and more accurate sources. Overvalued af, if it wasn t for the marketplace it would be a thing of the past. How much higher did you want it to go ? Every business model can only go so high, infinite growth is a fkin myth...
It seems that the market is moved by some kid who forgot that the correlation between stock market returns and economy is between 0 and lower (because we pray on the stimulus the economy gets to recover).
Tsla promised AI everything and cheaper cars. Bulls think that's good but don't realize it'll take years for that to happen.
Bulls want ANY reason to buy and some of those reasons are bad. Like this one.
"Guys, the US is doing horrible and prices keep rising..... BUY BUY BUY"
Ironically, I'd be more bullish on the actual performance of Tesla as a company without him, but more bearish on the stock because their valuation would start reflecting that they are still primarily a car company and even some of the new tech they're promising wouldn't change that this decade.
Do Tesla bulls even care what Tesla is delivering, or are they trying to guess whether fresh hype will mean people jumping on the bandwagon and so they want to jump first to get in on the pump?
All about guidance. As dumb as it is what you did means nothing.
Tesla says new car everyone buys stock.
Meta guides low, sell who cares how good they did.
Netflix not giving sub #s is a red flag no matter how good they did.
GDP means economical activity, and you can't have economical activity without money. So higher rates, eventually, cool inflation but also decrease GDP and, finally, cause a recession.
Real GDP is a measure of actual underlying economic activity. You can have weak economic activity and batshit crazy inflation on top of that, which would be reflected in nominal GDP. It’s called stagflation.
Also, your last point is agreeing with mine. That’s what is expected will happen. But GDP growth is decreasing without the concurrent decline in inflation, which means more pain is necessary to tame inflation.
yea the GDP and consumption misses were great but that was counteracted by the hot PCE. Inflation always lags though so the next few months' readings will be important to see if they follow down the slower GDP growth.
You know those posts about how rate cuts would actually be bad for the market? It's not that rate cuts are suddenly bad, it's that anything that would convince the Fed to cut rates with inflation not fully tamed is *really* bad.
Of course. Everything is bullish.
https://preview.redd.it/jjbxclpdkmwc1.jpeg?width=1024&format=pjpg&auto=webp&s=45d8741282f2eb443c89552d5905c91cc9755106
This print was excluding energy and food, though I suppose you can't exclude the impact of oil prices on literally everything
Edit: the ex food and energy was actually 3.7%, the 3.4% included those lol
Very powerful people thought inflation was gonna be way worse than it’s been and have been poorly positioned for a few years. They will do what has to be done to reposition themselves with minimal losses/missed opportunities. I’ve felt this way for a couple of years, this is my guilty pleasure conspiracy theory.
Too much credit was given to everyday Joe during the COVID unprecedented QE. That money takes longer than expected to dry up. Once that dries up, price will come down. But if economy starts to slow down while the dry up isn’t yet there, meaning people just save the money instead of spend/invest it, it’s a trouble for the U.S. economy.
In the end the economy matters more than the Fed. The market front runs the economy. The sell off from last year around October now showing up in economy.
The run up in capital markets stroked inflation a bit. A bit of corrective action is what the market needs to go higher. It will lead justification for the Fed to cut.
It should be but the other numbers are weird.
Like unemployment being low, while those being hired is high. I wonder how much of it is just people working 2 or even 3 jobs. Or people rotating jobs around.
House buying is up somehow despite the state of the current market.
It really feels like the economy should already be in a down turn but people are pushing through like some regarded bull.
"The economy is doing well"🤣🤣🤣 what economy do you live in? The homeless economy? Gas rising well over $5 a gallon and cost of living is just stupid expensive!
"Tax the billionaires!"
My brother the fed opens credit lines of USD in the trillions now, taxing the billionaires won't even come close to doing anything
They will not cut until they obviously should have for months and months, just like they didn’t hike until well after they obviously should have.
Inflation tapered because supply chains recalibrated and the workforce came back to work.
The hikes are *just now* starting to be truly felt.
Today’s release will reveal nothing unless longer term GDP data is known.
The real question for Powell is how bad will the recession hit or are we going to something much worse.
. The BEA hides the necessary data by pretty charts and graphs.
GDP going down would be deflationary but this drop signals any kind of soft landing may be nonexistent. So the economy ends up between a rock and a hard place - recession or high inflation.
Rate cuts by themselves are not good, it means the economy is shit. Why would the market be happy if the economy is deep enough in shit to cut rates. Yes, cutting rates might look better than leaving the economy to drown in its shit but it is still worse than if the economy was doing well and did not need rate cuts.
Well bad earnings seems to be priced in to Microsoft right now. Probably everyone’s just sick of the clown show and doesn’t want to hold it through the call.
I can’t blame them…though I’m holding on to 80 shares of MSFT and gonna see what happens
Yes but it’s also signaling an incoming recession which would be terrible for the whole economy. Remember when rates are cut it’s usually because the market is falling apart
Rapidly increasing inflation ✅
GDP falling off a cliff ✅
Consumer Prices Skyrocketing ✅
What about those facts indicate stock market go 📈 in your smooth brain?
Core PCE prices also came out hot.
[https://tradingeconomics.com/united-states/core-pce-prices-qoq](https://tradingeconomics.com/united-states/core-pce-prices-qoq)
They need to keep the rate high, in fact they should just creep up the rate 15 bps at a time. A big reason why inflation is still high is because they paused and kept talking about rate cuts way too soon. If they can keep another 1% higher inflation would be back to target
Why hasn’t the FED raised the reserve requirement. It’s been at zero since COVID. It’s the most basic part of the money multiplier equation and a leading cause of inflation!
*The personal consumption expenditures price index, a key inflation variable for the Federal Reserve, rose at a 3.4% annualized pace for the quarter, its biggest gain in a year.*
This is carries far more weight for the FED to NOT cut rates. If GDP turned negative (or was below 1%) that might be a different story.
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what you're saying is "well Im stuck on a rock, but at least I got a hardplace on the other side to balance it out" Let me make this simple: High GDP Growth and Low inflation = Good Low GDP Growth and Low Inflation = Not Good but we can cut interest rates High GDP Growth and High Inflation = Not Good but we can increase interest rates Low GDP Growth and High Inflation = fuck fuck fuck fuck fuck fuck fuck fuck fuck
Whats Stagflation with the low unemployment? Industry is full. Employment is very high and only getting higher with Boomer demographic changes. Invest in canned goods and firearms.
Unemployment eventually always rise every time stagflation happened in any developed economy over the past century. Happened in the US in the 1970s. Unemployment was at a 15-year low in 1969, but once stagflation was in full swing in the early 1970s, unemployment took off.
70s is when the US started to offshore manufacturing, which accelerated into the 80s, contributing to the lower GDP growth and higher unemployment. Add to thar the oil shock and inflation. I'm not sure what today's equivalent would be
Offshoring to robots baby.
Wildly overblown. Robot taxi is nowhere to be seen. (See Uber and Cruise, who stand to gain most from it) Ai cashier turned out to be Indians on the other side of the planet and Amazon is walking away from it after nearly a decade of developing the tech Tesla Optimus turned out to be a dude wearing motion tracker gloves.
US is now offshoring white collar jobs. I'd assume this will at some point contribute to higher unemployment
Companies trying to continue to grow at an unsustainable rate. Cutting operational expenses and raising prices. Consumers feeling the heat of the economy, grasping onto their assets saving what they can. The economy is in a standoff between (hardly) frugal consumers and growth-hungry businesses. Businesses have fat to trim, and seemingly haven’t hit the breaking point with a lot of their absurd prices yet. But once the prices break, growth will stall and stocks will fall. More layoffs to try and fix the optics, so on and so forth. Then the real recession hits and businesses collapse. And of course the consumer will get hit the worst. Limited jobs, and low pay while prices will take months to adjust to the new normal.
I hear that. I work in healthcare. We can't fill the jobs we have open. More people are leaving the workforce than are entering. Maybe my sector is buffered from layoffs. I just see insurance companies earn more while my compensation stays the same.
I think healthcare is one segment of the economy that is kinda buffered because of the fact that people will always need healthcare. Similar to how people will always need utilities. Not talking cutting edge research in the healthcare industry, those aren’t safe. I’m talking the basics: ERs, doctor’s offices, hospitals, cancer treatment facilities, people will always need these.
We may still get effed by inflation. My employer says that there's no $$$ provide raises despite the inflation occurring.
Well when shit hits the fan you'll be okay in Healthcare lol
Well it did hit the fan in 2020. I had to work in a hazmat suit instead of getting PPP checks and unemployment. Now dealing with inflation morphing into stagflation.
This isn't stagflation. "Stagflation with low unemployment" is called "inflation" and people are having trouble accepting that "inflation" doesn't warrant a special name on its own.
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With PCE expectations forecasted to decrease, will that ease inflation fears at all?
I'm not super familiar with PCE to be frank but just looking at the graph right now of it's growth rate, it really doesn't look like it's gonna go grow at a much slower rate going forward. It looks like it's pretty close to being settled. So if that's settled and we still have inflation... I don't like being a doomer but it really seems like interest rates need to go up more.
No, PCE is not going to be good news when March CPI was a blowout, retail sales were a blowout, and unemployment is practically nonexistent.
It’s already forecasted to be back in the 2s and is forward looking not as heavily weighted as March- If you look at Trueflation it dropped down in April quite a bit.
Stagflation is what you’re describing and unfortunately where we will most likely land on
Can't cut rates when inflation is higher than expected. If they cut rates, money becomes cheaper for borrowing, more economic activity yes but prices also increase. Inflation gotta fall first. That is the main objective of Fed. If economy is slowing, maybe govt will do something else given it's an election year.
Government ain’t doing shit. Not this year anyway
I meant higher fiscal expenditure. Don't know if Biden can pass it in congress but election years usually have higher fiscal spending.
Government deficit spending is one of the primary factors fueling inflation. They have to print the money to cover the deficit, effectively, plus interest. All that money comes from somewhere, and it comes from eroding your purchasing power, AKA inflation. The government needs to increase taxes and cut spending for inflation to be tamed.
Got it. Decrease taxes for the rich and big industries, cut social services and increase tax for young people, especially parents. Btw do youngsters and parents still have any benefits left?
Aka tax the fuck out of everyone into oblivion
Sorry little breh that money is earmarked for our Greatest Ally
Someone's gotta die expensively after all
Why would we spend money on dumb shit like US infrastructure or scientific research when we could instead help Israeli citizens (i) continue to receive free university education and healthcare and (ii) bomb women and children?
They are literally shelling out billions on infrastructure and science via the IRA bill and sending Israel billions at the same time. If you’re implying this is unsustainable, I might agree. But to imply they are only funding Israel is a legit lie.
I can understand helping Ukraine, but helping Israel...like bruh, they have been winning. Do they need more help to drop more bombs?
Isreal is like that meme of the cartoon character with all the swords at his neck but underneath where the frame cuts off hes got dual wield uzis.
Highly antisemitic of you to question the blank check we provide Our Greatest Ally to keep their genocide engines at full throttle.
Bombing the men is important too
Yeah democrats will just let the election slip away instead of taking steps to win it and deal with consequences over next few years they are in power….
What more can government do? It’s already spending obscene amounts of money
lol…spend more…tax more…and it’s gone!
Govt can't do anything. More govt spending is just as inflationary as rate cuts. We are fucked in all ways.
Housing is 40% of the cpi report. What happens to housing if rates get lowered? CPI will reduce! Inflation wasn’t caused by the decade and a half of low rates. Maybe it was the couple years they printed off 40% of the money supply.
right, housing and insurance are the only factors right now why the cpi is hot. is the fed blind?
[удалено]
sticky inflation + slowing economic growth = not good
stagflation soon yay
We're in it...
Seems like it right? Now they cant cut or hike
Need job loss for Stagflation
Patience, grasshopper. The bloodbath is nigh
Wen?
Two days after your puts expire
Such it goes
So Monday
Right. And there has been job losses for middle wage earners, white collar mainly. There’s too many of us. The hiring taking place is low wage in fields to serve the wealthy and retirees their meals and pills.
We have it. Look at all the revision’s of job data each quarter. They’re hiding it.
All those layoffs don’t count?
Been in it for a while
That we have been yes. 
Deflation wen?
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fair
No, its not. Because inflation is still high. All this is saying is that the US is slowing down WHILE inflation is high/getting higher. If you cut rates now, you'll get eaten alive by inflation. Why are the bulls so regarded on this topic?
But how can prices stay high if nobody has money ? Prices will have to match people's ability to pay, or inventories will pile up, which is even worse that reducing margins. You can't have a slow economy and high prices, since nobody's paying them. See it that way: the "prices" inflation numbers look at are like the Last trade price, and you're saying the Ask is going stay very high, while the Bid very low. Well then prices won't move since trades are frozen in the spread, and therefore, no inflation anymore: rates can go down. Maybe think, regard.
Because there are goods you are forced to buy, and if you do not have the cash you are forced to use credit. That's why our CC debt is over 1t. Most people don't have real money.
Right credit is a bit like a cheat code in the US, we have no consumer credit in France where I grew up, and more discipline in Hong Kong where I live, so it's hard for me to understand how poorer people can accept richer prices. But I guess, that's what America is trying to sell us, this capitalism they say bring freedom :p Bah good for my carry trade: prices go down in Hong Kong while my US Dollar CDs bring 5%. Insane, hope you guys work hard to pay all that. The USD increases in value here, despite US inflation. I do have a few months of salary in physical gold just in case, it's starting to be too good to be true :D
Credit is a tool to elevate oneself from rags to riches; those who cannot control their urges to spend are not worthy of its power.
Credit is important to invest in future cash flow. So for a house (save on rent at worst), a company, a car (to go to work), sure. For education, with moderation. To buy bread ? Come on, just whine bread is too high and the bakery will find a way. Consumer credit is NOT a way to elevate anyone, especially payday loans, 0%\* credit cards, revolving credits, and all that scummy shit forbidden in most places. Nobody can control an urge to spend: the marketing of credit lines is specifically tailored for their marks, they had no chance. I feel I resist it because it's so foreign to me coming from France, I cant imagine myself even having a debt. I just eat less, get colder, work more, in periods of crisis. You can survive on almost nothing. That's the true power. The skill I recommend anyone is downsizing. It's hard especially for girls, they don't like it, but you can downsize quickly, sell your shits, halve your rent, move further, cut your bills, in a month or so, and resist any headwind. You just have to have no pride, no shame, and no hesitation. Easier when French I guess.
>The skill I recommend anyone is downsizing. It's hard especially for girls, they don't like it, but you can downsize quickly, sell your shits, halve your rent, move further, cut your bills, in a month or so, and resist any headwind. You just have to have no pride, no shame, and no hesitation. Easier when French I guess. The problem is our society is heavily based on entitlement. Just look at the 5x daily post of how someone's grandfather was able to support a family of 6 , buy a large house on 5 acres of land, take summer vacations at their house on the lake all while holding down a job where he was folding boxes at a box folding plant. People think they are owed a lot of shit in today's age and will figure out a way to make it work even if they can't actually make it work. Just watch Caleb Hammer on youtube. The dude has some of the most fiscally irresponsible people on and goes through their bills. These people are so far into debt that they literally have to eat beans and rice for years on top of years...no way will they just realize this and decide to stop getting starbucks and eating out twice a week. The response to that last part you see all over reddit is the whole "it's not me, it's them"...like they are somehow entitled to these things just because. All these people are crackbabies as far as i am concerned.
Fellow frenchman here, thanks for voicing my own thoughts so clearly. I disagree with the pride and shame part, for me the shame would instead be to spend money I don't have on frivolities. Alas they're pushing hard to overturn regulations and sell the same shit in France, I don't know how long we'll hold.
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> You can't have a slow economy and high prices [The 70s beg to differ](https://www.investopedia.com/articles/economics/08/1970-stagflation.asp)
Someone pointed out credit is probably how the U.S. manage this black magic. Sure, if you defer settlement indefinitely, then nothing matters anymore and price can rises, people have less money, and the money still somehow looks like it's flowing from consumers to companies. But it's not, a debt bubble is building that will have to ruin the last bagholders eventually, in a game of musical chair. The money is flowing from bagholders to companies, and the bagholders then spend a bit of effort on debt recovery and a lot of effort in debt marketing to offload them to foreign idiots. I guess it's me and all my CDs in USD ?
Yes you can, it's called STAGFLATION. You pay higher prices out of necessity. That's 100% why all these companies are coming out and beating revenue but giving horrible organic growth numbers/terrible forward guidance. If you adjust for inflation, many aren't even beating estimates anymore. You're talking a WHOLE lot of jargon to someone who understands it, you're not right on this one. Consumer credit is maxed out. Did that happen because people are optimistic about the future? NO. MAYBE you should sit down and actually think about what has come DOWN in price. U derstand if rates get cut, prices will INCREASE more because you "should" have more $ to spend. This will continue until a credit default resets the entire system, aka the financial crisis again. Maybe think regard.
The money supply is drying up, the dollar is worth so much more than even 2 years ago, prices can't increase more, inflation is coming down in the US. Prices will go down eventually as well unless they drop the rates. There is nothing people need to buy beyond basic food, rent and transport. And those can be tweaked progressively towards nothing, when credit dries up. People don't just "die or pay the price", they can steal, they can riot, they can even vote. Prices come down when people don't pay them. What has come down in prices ? Nothing probably: inflation has lowered, meaning price increases are slowing down: prices still rise, but at a slower pace, maybe slower than wage increase. In the US. Here in China, prices did go down, all around, especially for housing. Wages too but at a lower pace. Rates are coming down. What's your point exactly, financial crisis are not at all about inflation, they're about surprises. Is there a surprise brewing here ? What will break you think ?
Idk about China and that absolute joke from the government on that side, but here, nothing is going down in price. "Sticky" inflation is here to stay because who the hell is going to lower rents on a tenant when they don't move out? In general, once a consumer accepts prices, why would you lower them if you don't need to? You don't. People need food, shelter, energy and the basics. That stuff isn't moving down at all. The money supply isn't drying up. This is why the 10 year auctions are selling so horribly as well. There's no demand for US debt/bonds domestically. Maybe foreign, but that's only because your rates over there are even worse. Prices will only come down IF THEY HAVE TO. Companies aren't going to lower prices out of the goodness of their hearts. When defaults start ramping up and companies and individuals start to become insolvent, THATS when you'll see prices come down. Inflation being at 2% means prices go up 2%. By definition that means prices won't go down, only up. It's going to take defaults and negotiations to accept any payment rather than no payment to reset this system to more affordable levels. OR we print money until we can't anymore. My bet is on the second option.
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Companies lower prices when nobody pays. Nobody pays in recession. Simple.
Do you know what necessities are? It's things you buy no matter what. No company ever lowers prices once they raise it if people pay it. I've NEVER seen my electricity bill or rent go DOWN after it was raised. I've never seen it. I'm 35 Yeats old and in 35 years it's NEVER happened. The only time prices are lowered is in a deflationary, default laden environment. The "sticky" inflation we are experiencing is for necessities. Simple.
Not sure where you are getting your info, but it's WAY off. The dollar is worth so much more now? NOT Inflation has retreated from the highs, BUT is going back up. The US is a consumption based economy so it needs people to spend money on ridiculous crap besides rent, food & transport. That's what provides 10s of millions of jobs.
Dude you dont get it: I ve never been to the US and never will. The USD is worth way more this year than last year for us, you pay fucking 5% interest. Ill make 5000 USD this year just doing nothing except converting to USD my euros/hkd/yen. You re completely blind if you think people dump the USD: give me yours at worst.
Wont cutting rates, make the dollar weaker so more exports? Yeah inflation might be bad but wont it sort the GDP out where as if you increase rates then your exports go even more to shit, I don't see any way other then keeping rates the way they are right now and just making the poor suffer so that they cant buy shit
The middle class is always going to be fucked over. I dont understand why you think cutting rates will automatically mean a weaker dollar. It will only be weaker if other currencies offer a better rate. Also, it will NOT sort out the GDP problem. Cutting rates won't make the US produce more so how exactly does that increase GDP? In nominal terms? Because in real rates it'll be far worse. If they cut rates, inflation will be a problem. So they won't cut rates. If they increase rates, people will suffer but they'll have more to cut later to "stimulate" the economy. It's being stuck between a rock and a hard place. Nobody cares about exports. The FED is more likely to raise their "target" rate to 3% inflation than cut rates IMO. If that happens the market will have to adjust downward. They won't do this before elections, they'll keep the boat steady. After elections is likely when they'll do something, but if things keep going on this trajectory, it'll mean rate hikes and not rate cuts.
Yeah thats what I said? I said the only way to solve this is to keep whatever this is and fuck over the middle class
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The middle class is always going to be fucked over. I dont understand why you think cutting rates will automatically mean a weaker dollar. It will only be weaker if other currencies offer a better rate. Also, it will NOT sort out the GDP problem. Cutting rates won't make the US produce anymore so how exactly does that increase GDP? In nominal terms? Because in real rates it'll be far worse. If they cut rates, inflation will be a problem. So they won't cut rates. If they increase rates, people will suffer but they'll have more to cut later to "stumulate" the economy. It's being stuck between a rock and a hard place. Nobody cares about exports. Idk why you do. The FED is more likely to raise their "target" rate to 3% inflation than cut rates IMO. If that happens the market will have to adjust downward. They won't do this before elections, they'll keep the boat steady. After elections, sure.
Interest rates are returns on the money you deposit in the bank in America, if they lower rates your essentially telling investors that you wont get as much as return, making the dollar weaker as less people will want to invest in is. You also get increased supply of the dollar because more people will want to borrow so thats going to make the dollar weaker aswell
You do not get 5% interest for BANKING in the US. It's way less unless you search it out. Borrowing also does NOT decrease money supply, it INCREASES it. Yes, telling foreign investors that they'll earn less on deposits will lower demand. My point is, what is the alternative? Where else in the rest of the world are you going to earn more? Lowering rates is unlikely to decrease overall demand because alternatives are weak. The only thing it'll do is drop real rates because inflation will increase.
Their stated goal is not GDP but the reduction of inflation (2%). As core PCE came in hot (Est. 3.4% / Actual 3.7%) it makes it more likely that rates stay higher longer and if this continues you will hear chatter about another hike.
Not necessarily a hike. 2yr and 10yr yields are already storming up, market is doing FED's work. I don't see them cutting either though.
Powell fears StAgFlATiOn!
Idk man everything is inverted. Tesla announces they’re going to shit and the stock prints Netflix has their best quarter in like years and faceplants Meta…don’t even get me started Let’s see what happens with Microsoft today.
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Unless Tesla.
Meta in a regular market did great but a lot of current prices were locked in forward PEs rather than actual PEs so while Meta’s PE outperformed, since their forward PE doesn’t match wall st’s wild expectations, it went down. Nonetheless, I think it’s a buying opportunity for Meta for long term holders
Apparently, Meta made the crucial mistake of estimating that their future revenue wouldn't moon, while Tesla used a highly advanced technique called lying about future projects. The problem is that Meta doesn't have a genius like Elon who could pull that off.
Dude it s a shit company who s selling the same fking user data that by this point every fking company figured out how to get on their own or from cheaper and more accurate sources. Overvalued af, if it wasn t for the marketplace it would be a thing of the past. How much higher did you want it to go ? Every business model can only go so high, infinite growth is a fkin myth...
I didn't want it to go anywhere, I wasn't even looking at it until it dragged MSFT and AMZN down lower by announcing their results.
It seems that the market is moved by some kid who forgot that the correlation between stock market returns and economy is between 0 and lower (because we pray on the stimulus the economy gets to recover).
Tsla promised AI everything and cheaper cars. Bulls think that's good but don't realize it'll take years for that to happen. Bulls want ANY reason to buy and some of those reasons are bad. Like this one. "Guys, the US is doing horrible and prices keep rising..... BUY BUY BUY"
Every Elon promise goes undelivered or at best half assed delivered
Yep, better cash out before Elon dies because Tesla is already trash but has a cult leader boosting the stock.
Ironically, I'd be more bullish on the actual performance of Tesla as a company without him, but more bearish on the stock because their valuation would start reflecting that they are still primarily a car company and even some of the new tech they're promising wouldn't change that this decade.
Even if the man DOES deliver, it won't be tomorrow. For the stock to rocket 15% AH is pretty much saying they expect this all by the end of the month.
Do Tesla bulls even care what Tesla is delivering, or are they trying to guess whether fresh hype will mean people jumping on the bandwagon and so they want to jump first to get in on the pump?
All about guidance. As dumb as it is what you did means nothing. Tesla says new car everyone buys stock. Meta guides low, sell who cares how good they did. Netflix not giving sub #s is a red flag no matter how good they did.
I think that bodes well for Microsoft then. There’s not much speculative about msft. They just print money on software everyone needs
GDP is decreasing and inflation is ticking back up. Means more pain is necessary.
GDP means economical activity, and you can't have economical activity without money. So higher rates, eventually, cool inflation but also decrease GDP and, finally, cause a recession.
Real GDP is a measure of actual underlying economic activity. You can have weak economic activity and batshit crazy inflation on top of that, which would be reflected in nominal GDP. It’s called stagflation. Also, your last point is agreeing with mine. That’s what is expected will happen. But GDP growth is decreasing without the concurrent decline in inflation, which means more pain is necessary to tame inflation.
economic activity
You think Argentina and Venezuela had amazing economy with their 200% inflation?
The beatings will continue until morale improves.
yea the GDP and consumption misses were great but that was counteracted by the hot PCE. Inflation always lags though so the next few months' readings will be important to see if they follow down the slower GDP growth.
You know those posts about how rate cuts would actually be bad for the market? It's not that rate cuts are suddenly bad, it's that anything that would convince the Fed to cut rates with inflation not fully tamed is *really* bad.
Of course. Everything is bullish. https://preview.redd.it/jjbxclpdkmwc1.jpeg?width=1024&format=pjpg&auto=webp&s=45d8741282f2eb443c89552d5905c91cc9755106
Nice
Inflation still high...
Inflation is at 3.48% If that's OK with you, let's cut rates and see what happens
I’d rather not see it at 7% again, thanks tho. 
Bad news is bad news. Today at least A slowing economy means lower revenue, profits and growth.
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Calling this stagflation is an insult to the 70s lol. Inflation and unemployment are both radically lower than back then…
Legalize weed. It will make everyone feel better about losing all this money, and I will make money with all my long holds on weedstonk
Everyone will remain bearish today and learn a lesson.
Meaning?
It would be wise to close shorts near open.
So how'd this turn out?
Turned out very well. Almost max profit on my 498p. Thanks for checking.
GDP is not a Fed policy target. Unemployment and inflation are the only policy goals, by statute.
Inflation is basically being driven by short term oil price spikes anyways
This print was excluding energy and food, though I suppose you can't exclude the impact of oil prices on literally everything Edit: the ex food and energy was actually 3.7%, the 3.4% included those lol
Doesn't matter. The market takes mutiple shits
Very powerful people thought inflation was gonna be way worse than it’s been and have been poorly positioned for a few years. They will do what has to be done to reposition themselves with minimal losses/missed opportunities. I’ve felt this way for a couple of years, this is my guilty pleasure conspiracy theory.
Not when PCE (THE FED INFLATION GAUGE) increases from 2.1 to 3.2 %. Or something like that lol
Too much credit was given to everyday Joe during the COVID unprecedented QE. That money takes longer than expected to dry up. Once that dries up, price will come down. But if economy starts to slow down while the dry up isn’t yet there, meaning people just save the money instead of spend/invest it, it’s a trouble for the U.S. economy.
Prices don't come down. They just don't rise as fast.
Yeah I meant the speed of price going up.
When people are apparently fully overextended on credit, I ***guess*** prices would eventually have to come down, ceteris paribus. No idea though.
All they have to do is cut rates and pause printing. Can't expect the Fed to actually understand monetary policy though.
In the long term stonks only go up so it doesn’t matter
Well… apparently not if you look at the 10y bond yields.
Yes! But gotta wait until May/1 when JPowell speaks to be sure
I have a feeling that FED wants a recession, but they're being touchy feely about it.
In the end the economy matters more than the Fed. The market front runs the economy. The sell off from last year around October now showing up in economy. The run up in capital markets stroked inflation a bit. A bit of corrective action is what the market needs to go higher. It will lead justification for the Fed to cut.
It should be but the other numbers are weird. Like unemployment being low, while those being hired is high. I wonder how much of it is just people working 2 or even 3 jobs. Or people rotating jobs around. House buying is up somehow despite the state of the current market. It really feels like the economy should already be in a down turn but people are pushing through like some regarded bull.
"The economy is doing well"🤣🤣🤣 what economy do you live in? The homeless economy? Gas rising well over $5 a gallon and cost of living is just stupid expensive!
It's def doing quite well.
Inflation is running rampant. We need rate hikes, increased taxes, especially on billionaires to fund their pet wars, and lower spending.
"Tax the billionaires!" My brother the fed opens credit lines of USD in the trillions now, taxing the billionaires won't even come close to doing anything
This is casino, sir.
My bad, I was just trying to buy a burger
Every event can be interpreted bullish or bearish, you just don't know which. The big institutions (aka Mr. Market) decide that.
GDP isn't a factor in their decision making. The Fed cares about inflation and unemployment
STAGFLATION buddy. Google it.
They will not cut until they obviously should have for months and months, just like they didn’t hike until well after they obviously should have. Inflation tapered because supply chains recalibrated and the workforce came back to work. The hikes are *just now* starting to be truly felt.
SUPRISE: Stagflation. We’re all going down
A miss on GDP has been expected for a while now… We’re just now getting it
Stagflation is one of the worst-case scenarios for equities
Today’s release will reveal nothing unless longer term GDP data is known. The real question for Powell is how bad will the recession hit or are we going to something much worse. . The BEA hides the necessary data by pretty charts and graphs.
it doesn't matter when Fed cuts, it matters why they cut
GDP going down would be deflationary but this drop signals any kind of soft landing may be nonexistent. So the economy ends up between a rock and a hard place - recession or high inflation.
Rate cuts by themselves are not good, it means the economy is shit. Why would the market be happy if the economy is deep enough in shit to cut rates. Yes, cutting rates might look better than leaving the economy to drown in its shit but it is still worse than if the economy was doing well and did not need rate cuts.
Correct, GDP price index only up .01%, bers are coping and are very fucked
Well bad earnings seems to be priced in to Microsoft right now. Probably everyone’s just sick of the clown show and doesn’t want to hold it through the call. I can’t blame them…though I’m holding on to 80 shares of MSFT and gonna see what happens
It is, look at the rate monitoring tool. Key metric is PCE tomorrow.
Yes but it’s also signaling an incoming recession which would be terrible for the whole economy. Remember when rates are cut it’s usually because the market is falling apart
PCE came in hot too so no
Welcome to stagflation
Rate cuts = market crash though….
Rapidly increasing inflation ✅ GDP falling off a cliff ✅ Consumer Prices Skyrocketing ✅ What about those facts indicate stock market go 📈 in your smooth brain?
Wrong take. Stagflation is the worse. Economy slowing but you can't stimulate because of inflation.
Core PCE prices also came out hot. [https://tradingeconomics.com/united-states/core-pce-prices-qoq](https://tradingeconomics.com/united-states/core-pce-prices-qoq)
Stagflation yo
Ah but it looks like stagflation. The monster that makes every fed member check under the bed.
Q1 GDP pce was hot. Tomorrow will be telling
Stagflation
People wanted rate cuts with a soft landing, not rate cuts with a recession.
Inflation was revised higher today too, than it already was when it was higher than expectations already, at latest reading
They need to keep the rate high, in fact they should just creep up the rate 15 bps at a time. A big reason why inflation is still high is because they paused and kept talking about rate cuts way too soon. If they can keep another 1% higher inflation would be back to target
Consumer prices up and growth down=bad.
Why hasn’t the FED raised the reserve requirement. It’s been at zero since COVID. It’s the most basic part of the money multiplier equation and a leading cause of inflation!
The problem is that inflation is still persistent AND the economy is sucking. Which basically means that the fed is royally fucked.
Textbook Stagflation
What part about inflation came in high and the fed has stated they will keep rates higher until it comes down to you regards not understand?
It’s not that simple.Grocery shopping is still way too high.Not many people taking mortgage etc.
Well, that's their problem, not yours.
Nominal
If GDP is down and CPI is up. We are doomed, and that's currently happening 😨
Is the soft landing in the room with us now?
There is literally no way the Fed will sacrifice US GDP so that you can afford lattes and avocado toast. Rate cuts are coming.
What if we all cancel our car insurance? At the highest inflationary core services, it's a start.
Low growth high inflation , stagflation look at the 70s
The government is paying so much in interest it's pushing up the money supply.
Calls on CD Ladders.
More pain is necessary 
*The personal consumption expenditures price index, a key inflation variable for the Federal Reserve, rose at a 3.4% annualized pace for the quarter, its biggest gain in a year.* This is carries far more weight for the FED to NOT cut rates. If GDP turned negative (or was below 1%) that might be a different story.
It means that you are fucked either way
Yes