As I mentioned yesterday, uncertainty on inflation is one reason interest rates on US debt have not trended down, despite the big Federal Reserve rate cut. Yesterday’s CPI report came in above expectations, suggesting that indeed, inflation is not completely tamed. The data gets chopped up in different ways, from overall to “core”, to services, to goods, to supercore, etc. And some of the methodology makes you wonder if it captures what is really occuring in regard to actual consumer purchases. Core CPI rose .3% month-over-month, compared to expectations of .2% and 3.3% year-over-year compared to 3.2% expectations. Services prices rose, as did food costs, not that anyone has to eat. Car insurance continued its meteoric climb and the stats are catching up with reality as a sharp rise in medical services prices was recorded.
Total inflation during the Bidementia administration is over 20% and real wages–income after inflation–has declined. That is why consumers rightly perceive themselves to be worse off than the billionaires funding Harris’ campaign with its endless stream of vacuous ads. (BLS Data)
Remember that interest rates are function of supply and demand. With Washington’s excessive deficit debt issuances in the last few years , long rates were artificially pushed up via the crowding out effect : The government overcompeting with the private sector for investor/lender available funds. 30 year mortgage loan customers can direct their angst not to the Fed but to the Treasury . The Fed has actually refused to participate in purchasing gov’t debt at lousy auctions and continues contracting its balance sheet .