Latest Inflation Numbers and Discussion

[almost there]

Agree, and what's comical is what MSM is pointing to as its root cause.
At this point, I cant see any real reason for it to go down much.
Will have to see how it all plays out. I mean did anyone really think a fed rate of 1.5% to 1.75% would do anything? Maybe the media convinced folks that it could? Rates still artificially low, with high inflation. This is a 1st. So I do not believe that anyone really knows how this will end. As its a 1st time evolution.

[jazz4cash]

What is the 4.3 five year instrument? CD, MYGA, or ? It would be helpful to others if you care to share. I don’t see this inflation news as good for savers. Rates are not going up enough to keep pace so we are going backwards. I agree locking in or laddering higher rates is a good move now.

[JoeWras]

Quote:

Originally Posted by Car-Guy I expect many of the talking heads today will say the recent drop in oil prices isn't taken into account in these numbers and it really ins't that bad....

So I don't have cable, but I have XM, and couldn't resist listening to CNBC. There were a variety of opinions. Cramer (yeah, I know) had a take that the numbers are bogus because around him he sees stuff dropping, like used cars.

Maybe that's true in his NY neighborhood, but in general used cars aren't exactly cratering. They are floating up and down month to month right now with no clear down trend yet.

Next month will be better because of commodities, but you gotta look at the core. The core is still accelerating. Core removes food and energy from the mix. Core month-to-month needs to start dropping. But it isn't yet. And I think a lot of that has to do with shelter. The shelter number is huge in the CPI calculation, but the way it is calculated involves a long lag. It is still absorbing last year's skyrocketing rise, and will continue to do so for the rest of this year.

[ShokWaveRider]

Quote:

Originally Posted by jazz4cash What is the 4.3 five year instrument? CD, MYGA, or ? It would be helpful to others if you care to share. I don’t see this inflation news as good for savers. Rates are not going up enough to keep pace so we are going backwards. I agree locking in or laddering higher rates is a good move now.

No worries, I have shared many times they are MYGAs. Here are a few.

https://www.immediateannuities.com/d...ma-filter-form

[Sunset]

Quote:

Originally Posted by ShokWaveRider Watch the Rates rise. For us Savers and Fixed income investors (Not Bond funds), there is light. Maybe time to lock in long term MYGAs and CD's. We secured a 4.3% 5 Year this week. Looking for a few more, may push our luck to 6 or 7 years. 5% is a live like a King and Queen number for us. .....

Yep, happy days are here again, only losing 4.1% per year

[ShokWaveRider]

Quote:

Originally Posted by Sunset Yep, happy days are here again, only losing 4.1% per year

You have to play the long game (Well ~5year long game); all will stabilize in the fullness of time. It is one of those "If you won the game" things, 5% is a lot better than -15%. Our personal inflation rate is nowhere near 9.1%

[Freedom56]

The inflation report this morning is a lagging indicator. The bond market is looking past that report with the oil and other commodity bubbles bursting, gas prices dropping, a huge inventory buildup, and the USD rising. It is a good time for savers and fixed income investors. All those businesses that have been gouging consumers have created their own demand destruction. The short term profit gains are going to lead to longer term misery.

[jebmke]

Quote:

Originally Posted by Freedom56 The inflation report this morning is a lagging indicator. The bond market is looking past that report with the oil and other commodity bubbles bursting, gas prices dropping, a huge inventory buildup, and the USD rising. It is a good time for savers and fixed income investors. All those businesses that have been gouging consumers have created their own demand destruction. The short term profit gains are going to lead to longer term misery.

a lot of sales at local big boxes here. Back to school sales already started. They have too much stuff. Not a day goes by that I don't get an email from Best Buy or NewEgg with deeper discounts on computers and electronics. Can't speak to food -- my wife does all the food shopping. Can't speak to cars - I don't need one right now.

[Freedom56]

Quote:

Originally Posted by jazz4cash What is the 4.3 five year instrument? CD, MYGA, or ? It would be helpful to others if you care to share. I don’t see this inflation news as good for savers. Rates are not going up enough to keep pace so we are going backwards. I agree locking in or laddering higher rates is a good move now.

Would you rather earn 4.5% from an A rated 3 year corporate note or 1.3% from cash balances or a whopping 1.5% from short term bond funds and watch your capital erode at the same time?

You have to look at the big picture. How high can rates go with $30T in national debt and $54T in corporate debt? Zero rate policies create bubbles and hurt savers. A normalized rate environment will be better. It will be painful short term for bubble induced investments, but will be great for savers and fixed income investors.

[steelyman]

The I bond rates announced in May weren’t so far off after all.

[corn18]

Yeah! Bigger COLA!

[almost there]

Odd way of looking at it. )

[braumeister]

Threads merged.

[Chuckanut]

Quote:

Originally Posted by Freedom56 All those businesses that have been gouging consumers have created their own demand destruction. The short term profit gains are going to lead to longer term misery.

While I am not sure about the gouging comment, I do basically agree with you. I am hearing a lot of chatter among my peers about cutting back this, eliminating that, and finding a cheaper replacement for some other thing.

The Stella beer I bought is 20% cheaper and almost as good as the higher priced craft brew Session I was buying.

I am thinking of making a new horror movie called Gas and Groceries.

[Gumby]

Quote:

Originally Posted by steelyman The I bond rates announced in May weren’t so far off after all.

The I-bond rates are a simple calculation, and it is backward looking, not predictive. To wit: I-bond rate for May 2022 = ((CPI-U for March 2022/CPI-U for September 2021) x 2)-2

Quote:

Originally Posted by corn18 Yeah! Bigger COLA!

Based on the new numbers, Social Security COLA for 2023 will be 9% at least.

[madatrub]

Quote:

Originally Posted by Freedom56 The inflation report this morning is a lagging indicator. The bond market is looking past that report with the oil and other commodity bubbles bursting, gas prices dropping, a huge inventory buildup, and the USD rising. It is a good time for savers and fixed income investors. All those businesses that have been gouging consumers have created their own demand destruction. The short term profit gains are going to lead to longer term misery.

Be careful with claims of "huge inventory buildup". Gasoline is still on a knifes edge, especially in PADD1. We normally build leading into this time of year.

[Winemaker]

One major key is whether Russia turns the Natty Gas pipeline back on July 22nd. They shut the pipeline down every year for maintenance for 10 days contractually, but it is unclear whether they will oblige. All hell will break loose then in Europe, as they will pay big Euros to get their hands on any form of hydrocarbans.

[almost there]

Nah, they have solar and wind now.

[Freedom56]

Quote:

Originally Posted by madatrub Be careful with claims of "huge inventory buildup". Gasoline is still on a knifes edge, especially in PADD1. We normally build this time of year.

I was referring to retailers. I should have made that clear. Prices for consumer electronics are plunging fast. All those hard to get furniture items are now being liquidated. Apparel prices are dropping fast.

[aja8888]

Quote:

Originally Posted by almost there Nah, they have solar and wind now.

If they get the politicians talking in the right direction, maybe those windfarms will start spinning again!