No Spin Ag said:

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Aggie95 said:

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None of it makes sense anymore.

The average American is complaining about depressed wages, and no ability to keep up with inflation. Yet we see reports of consumer demand high enough to drive further inflation?

I understand why the Covid giveaways created substantial consumer demand and high inflation based on the thousands and thousands of extra dollars suddenly in the pockets of lower and middle class Americans, but that money was spent over four years ago.

Our government has spent wildly for many decades. Yet during the majority of that time, inflation was "in check" why is it different at this point in time?

I am not disagreeing with the notion that we are spending way too much money and that our government budget is obscenely bloated . However, the supply and demand aspect of inflation seems to be out of whack right now.

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Consumers have new ways to buy things in payments that don't require credit cards now.

That's helping keep the economy from having its much overdue collapse.

Take away all forms of credit, for the rich and poor alike, and then we'll see just how strong our economy actually is.

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Absolutely not happening.

" The broad U.S. stock market also got a lift from easing Treasury yields in the bond market. They regressed after a report showed inflation is behaving pretty much as economists expected."

https://stocks.apple.com/AMfRcUSsrSzaxWpxy3lPkXg

MemphisAg1 said:

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B-1 83 said:

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What was the price of oil? What is it now?

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This is core PCE. Gasoline has nothing to do with it. Oil is relevant only to the extent that it's used in products like plastics and clothes that have higher costs because of oil, which will be minimal.

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Oil impacts transportation costs, which affects most things. PCE will be headed down as a laggart based on that fact alone.

Logos Stick said:

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Aggie Spirit said:

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"Reading between the lines, that means rates could be headed up."

Or down.

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LOL

I don't think Trump will allow his boy to raise rates.

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You're not wrong. Yet, there is so much wrong in that being the truth.

"Not long term rates, which are set by the bond market and not the Fed."

So your point is that the FOMC may be raising the Fed Funds rate soon? Surely, it's possible but I wouldn't hold my breath. The market has vacillated significantly about that happening and while one or two increases may be priced in right now that could change again soon.

"Step back and look at the big picture:

1. The US is running annual deficits of 6% to 7% annually."

This is a problem.

"2. This is increasing our national debt as a percentage of GDP. It's near levels not seen since WW2."

This is a problem.

"3. The 10 year Treasury note has responded and continues inching upward after a long period of decline since the 1970's. Bond holders are demanding a greater risk premium from the US government to lend it money."

The 10 year Treasury note ("T10") responded during the immediate post pandemic period. It has been largely range bound for three years since. Bond holders usually demand notable term premium for duration risk but the post GFC days of the Fed worrying about deflation and the presence of cheap money (~2009 to 2021) are likely gone forever. T10 prices more like it did before the GFC.

"4. Our annual interest bill has exploded to over $1 Trillion. This just reinforces the circular pattern of higher deficits, higher debt, and higher rates."

Not sure if and how it plays into higher rates, but along with other taxpayers I hate to see my taxes being wasted on the volume of interest payments.

army01 said:

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Logos Stick said:

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Aggie Spirit said:

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"Reading between the lines, that means rates could be headed up."

Or down.

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LOL

I don't think Trump will allow his boy to raise rates.

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You're not wrong. Yet, there is so much wrong in that being the truth.

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Why? Cause you believe Jerome Powell acted without biased and immune to political pressure?

That the most powerful man in the world and the most economically coherent POTUS we have ever had should somehow NOT have a say on US rates?

What is so "wrong" with that?

flown-the-coop said:

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No Spin Ag said:

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Aggie95 said:

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None of it makes sense anymore.

The average American is complaining about depressed wages, and no ability to keep up with inflation. Yet we see reports of consumer demand high enough to drive further inflation?

I understand why the Covid giveaways created substantial consumer demand and high inflation based on the thousands and thousands of extra dollars suddenly in the pockets of lower and middle class Americans, but that money was spent over four years ago.

Our government has spent wildly for many decades. Yet during the majority of that time, inflation was "in check" why is it different at this point in time?

I am not disagreeing with the notion that we are spending way too much money and that our government budget is obscenely bloated . However, the supply and demand aspect of inflation seems to be out of whack right now.

---

Consumers have new ways to buy things in payments that don't require credit cards now.

That's helping keep the economy from having its much overdue collapse.

Take away all forms of credit, for the rich and poor alike, and then we'll see just how strong our economy actually is.

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Absolutely not happening.

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I hope not. I just worry about these new ways of paying when people can't even afford horrible credit cards doesn't create a bubble of sorts.

I mean, I'm sure since it's tied to creditors (i.e. banks) likely not, but who knows.

Aggie95 said:

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None of it makes sense anymore.

The average American is complaining about depressed wages, and no ability to keep up with inflation. Yet we see reports of consumer demand high enough to drive further inflation?

I understand why the Covid giveaways created substantial consumer demand and high inflation based on the thousands and thousands of extra dollars suddenly in the pockets of lower and middle class Americans, but that money was spent over four years ago.

Our government has spent wildly for many decades. Yet during the majority of that time, inflation was "in check" why is it different at this point in time?

I am not disagreeing with the notion that we are spending way too much money and that our government budget is obscenely bloated . However, the supply and demand aspect of inflation seems to be out of whack right now.

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K economy. WSJ just had an article that the top 20% account for more spending than has ever been recorded. Bottom 20% the least ever.

That's how you get both things can be true here.

How does the core inflation number account for transportation costs to get goods or services to market because that's directly related to oil prices even when excluding fuel and food prices from the equation. The price of almost any hard good and many services are impacted by oil prices.

YouBet said:

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Aggie95 said:

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None of it makes sense anymore.

The average American is complaining about depressed wages, and no ability to keep up with inflation. Yet we see reports of consumer demand high enough to drive further inflation?

I understand why the Covid giveaways created substantial consumer demand and high inflation based on the thousands and thousands of extra dollars suddenly in the pockets of lower and middle class Americans, but that money was spent over four years ago.

Our government has spent wildly for many decades. Yet during the majority of that time, inflation was "in check" why is it different at this point in time?

I am not disagreeing with the notion that we are spending way too much money and that our government budget is obscenely bloated . However, the supply and demand aspect of inflation seems to be out of whack right now.

---

K economy. WSJ just had an article that the top 20% account for more spending than has ever been recorded. Bottom 20% the least ever.

That's how you get both things can be true here.

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So 80% of the economy is doing fine and the least impactful
20% is struggling a bit.

Guess it resembles a a bit of a lower case "k" with an outgrowth.

wages have outpaced inflation under Trump:

and yet GDP growth is better than expected at 2.1%

There you go again with your facts.

halfastros81 said:

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There you go again with your facts.

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believe that has actually slipped back to slightly negative but not expected to endure and likely has already resolved.

Rapier108 said:

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Another big driver of inflation is the AI craze.

The cost of everything electronic has gone vertical, assuming us lowly civilians can find them at all. RAM, SSDs, hard drives, graphic cards, etc. etc. etc. have skyrocketed in price because all of the AI companies are sucking them up, and don't care what the price is. They'll gladly pay $2000 for a 30TB hard drive if it means they get it quicker than a competitor.

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^
This

Quote:

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WSJ: The Data-Center Boom Is Sparking a Third Wave of Inflation

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Tim Cook, who told The Wall Street Journal that the jump in costs was unlike anything he had seen “in any area in over 40 years.”

Biggest price jump in anything I’ve ever seen too. https://t.co/aypJGgssnN

— Elon Musk (@elonmusk) June 25, 2026

Inflation is going to drop significantly to the degree Trump and company can hold together this peace deal so I agree it's going to flop around again in short order .

MemphisAg1 said:

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B-1 83 said:

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What was the price of oil? What is it now?

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This is core PCE. Gasoline has nothing to do with it. Oil is relevant only to the extent that it's used in products like plastics and clothes that have higher costs because of oil, which will be minimal.

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To answer his question on WTI oil
Mar 1 66/bbl
May 1 100/bbl
Now 70/bbl

74Ag1 said:

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MemphisAg1 said:

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B-1 83 said:

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What was the price of oil? What is it now?

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This is core PCE. Gasoline has nothing to do with it. Oil is relevant only to the extent that it's used in products like plastics and clothes that have higher costs because of oil, which will be minimal.

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To answer his question on WTI oil
Mar 1 66/bbl
May 1 100/bbl
Now 70/bbl

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Transportation costs of consumer goods in the total basket that PCE measures is very small. Core PCE, which excludes what consumers pay directly for gasoline and diesel, isn't running hot because of a temporary spike in oil. It's due to many other factors beyond that. If it was due primarily to the oil spike, then core PCE will drop sharply now that oil has returned to recent norms, and the market isn't buying that. It's why you're seeing the 2 year Treasury bond move up recently closer to the 10 year bond. The market is expecting more inflation than the Fed was advertising.

The costs of carbon steel and other alloys have skyrocketed due to tariffs. That certainly can't help.

Get used to inflation like this. DOGE failed and congress can't pass a balanced budget, inflation is how the Fed has decided to manage the national debt.

This is the most succinct explanation I've seen:

halfastros81 said:

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Inflation is going to drop significantly to the degree Trump and company can hold together this peace deal so I agree it's going to flop around again in short order .

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Just to be clear, there is NO peace deal to hold together.

You have a high-level 14-point framework that outlines, with broad interpretation, what a peace may or may not consist of.

Tariffs then?

Edit: Should have paused to read the next post after yours.

Lawt people will work to blame Trump regardless.

Oils down but tariffs remain high!

If all that fails it will be back to AI job killing and H1-Bs.

Folks, moose at the front should have told you the economy is ***** Bite the pillow for 2H 2026

Fair enough. I'll rephrase, if the oil is flowing thru the SoH inflation will come down significantly and wage growth rate will exceed inflation rate again.

halfastros81 said:

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Fair enough. I'll rephrase, if the oil is flowing thru the SoH inflation will come down significantly and wage growth rate will exceed inflation rate again.

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Roger that. I was clarifying because so many get the concept of the MOU so horribly wrong despite nonstop Trump admin providing the additional context and details.

I get the point you were making though and agree. Very much agree.

Couple things from someone in the manufacturing/retail sector.

1. Tariffs are causing inflation. I know it's last year's news, but it takes time for it to get all the way to the customer. When you increase the price of goods by 10% coming into the country, the price will eventually make it's way to the end of the supply chain in a retail store. Even things that are made in the USA can be reliant on parts that come from overseas.

2. Iran War - oil/gas may not be in this particular calculation (just going off comments from others in this thread), but the strait of Hormuz being closed created chaos in multiple industries.

• Fertilizer - the world lost about 25% of it's fertilizer movement, so generally speaking, we will be seeing food prices go up,
• Oil and Gas are used to make a lot of things. Anything that is made out of plastic, synthetic fabrics, synthetic leather, cosmetics, cleaning supplies, auxiliary parts for electronic devices...... etc. all would have seen significant price increases in the past 4 months. I am in one of these industries, and we passed along price increases to our customers, effective in June. They are planning on raising their prices at retail in July / August.

I have voted republican in almost every election since I've been 18..... but all of this lays directly at Trump's feet. For someone who constantly proclaims how good he is at "business", I have never seen a President be so disruptive to the business world. It's really hard for someone like myself to make sound business decisions when there's no consistency from the top and we don't know what's coming next.

The big inflation will come once the US Treasury is printing dollars to pay interest on the debt. See what happened in the Weimar Republic.

Inflation is the result of monetary policy. 60 years of spending money we don't have has put us in a very dangerous predicament where either we stop deficit spending (not going to happen), or print dollars at ever increasing rates. Within 10 years the USA will have 100% inflation a month.

Trump is only partially responsible for 5.5 years of overspending. Congress spends the money. And as we recently confirmed, congressmen steal as much of the money as they can get their hands on. LBJ starting The Great Society plus the Vietnam War started us down this catastrophic path.

pfo said:

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The big inflation will come once the US Treasury is printing dollars to pay interest on the debt. See what happened in the Weimar Republic.

Inflation is the result of monetary policy. 60 years of spending money we don't have has put us in a very dangerous predicament where either we stop deficit spending (not going to happen), or print dollars at ever increasing rates. Within 10 years the USA will have 100% inflation a month.

Trump is only partially responsible for 5.5 years of overspending. Congress spends the money. And as we recently confirmed, congressmen steal as much of the money as they can get their hands on. LBJ starting The Great Society plus the Vietnam War started us down this catastrophic path.

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We have been told if demand for something goes up without supply going up, the resulting price increases are "inflation". Is basic supply and demand now monetary policy?

The Weimar Republic and 100% per month inflation within 10 years is Friday post-happy-hour level of hyperbole. Entertaining but not much use.


Finally, the chart below is simple yet informative. Shows that indeed defense spending has been a YUGE culprit, but those pesky great society programs didn't start outpacing defense until the 1990's (Clinton helped out with Rs in the 2nd term who helped balance budgets by gutting military spending, such a grand idea for our sovereignty) and then the healthcare spending EXPLOSION under Obama and his Not-So Affordable Care Act.

flown-the-coop said:

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pfo said:

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The big inflation will come once the US Treasury is printing dollars to pay interest on the debt. See what happened in the Weimar Republic.

Inflation is the result of monetary policy. 60 years of spending money we don't have has put us in a very dangerous predicament where either we stop deficit spending (not going to happen), or print dollars at ever increasing rates. Within 10 years the USA will have 100% inflation a month.

Trump is only partially responsible for 5.5 years of overspending. Congress spends the money. And as we recently confirmed, congressmen steal as much of the money as they can get their hands on. LBJ starting The Great Society plus the Vietnam War started us down this catastrophic path.

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We have been told if demand for something goes up without supply going up, the resulting price increases are "inflation". Is basic supply and demand now monetary policy?

The Weimar Republic and 100% per month inflation within 10 years is Friday post-happy-hour level of hyperbole. Entertaining but not much use.


Finally, the chart below is simple yet informative. Shows that indeed defense spending has been a YUGE culprit, but those pesky great society programs didn't start outpacing defense until the 1990's (Clinton helped out with Rs in the 2nd term who helped balance budgets by gutting military spending, such a grand idea for our sovereignty) and then the healthcare spending EXPLOSION under Obama and his Not-So Affordable Care Act.

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"Inflation is always snd everywhere a monetary phenomenon, in the sense than it is and can only be produced only by a more rapid increase in the quantity of money than output"…….Milton Freedman

Your response is insulting and wrong! Milton Freedman nailed it! Quit while you are behind.

I think we wound up posting past each other.

I was mocking the poor take that inflation is simply the rising price of something, which it is not.

The graph is meant to show that the debt explosion was set by defense spending, then by the 1990s had been supplanted by "pensions" or social security programs and then in the late oughts by healthcare.

Though I contend that economics is not something that adheres to ancient principles that could not fathom the complexities of the modern system.

Yikes. Nice use of scale to hide what's going on. Wages are essentially flat under Trump 2.0

B-1 83 said:

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MemphisAg1 said:

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B-1 83 said:

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What was the price of oil? What is it now?

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This is core PCE. Gasoline has nothing to do with it. Oil is relevant only to the extent that it's used in products like plastics and clothes that have higher costs because of oil, which will be minimal.

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Since when does spiking oil prices not impact the economy in all aspects and products - not just direct energy costs and ag commodities? AI seems to think t has an impact….
"Personal Consumption Expenditures (PCE) inflation rises primarily due to stronger consumer demand, supply chain disruptions, escalating service sector costs, and spikes in volatile commodities like energy"

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Also, everything is moved by ship, train, plane, and truck all of which use fuel