Economic News Thread | Consumer Confidence declines

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CFordUNC said:
Man, this Trump economy is absolutely terrible.
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I paid 50 cents more yesterday for the Slow Roasted Chicken Cheesy Dipping Burritos from Taco Bell than I did last week. Price jumped from $4.99 to $5.49 and I swear that they downsized them also.

Thanks Trump
 


U.S. inflation ticked higher last month, in latest sign of persistent price pressures​


“… Friday’s report from the Commerce Department showed that consumer prices rose 2.6% in December from a year earlier, up from a 2.4% annual pace in November and the third straight increase. Excluding the volatile food and energy categories, prices increased 2.8% compared with a year ago, the same as in November and October.

The figures arrive just two days after Federal Reserve officials, led by Chair Jerome Powell, decided to pause their interest rate cuts in part because inflation has largely been stuck at about 2.5%, above their 2% target, for the past six months.

There were some positive signs in Wednesday’s report, however. When measured in shorter time frames, inflation is slowing: In December, core prices ticked up 0.2% from the previous month, a pace that is nearly consistent with the Fed’s annual target. Economists — and Fed officials — pay close attention to core prices because they provide a better read on where inflation is headed. …”
 


“… At issue is a strategy pursued by the Treasury Department since late 2023 to lean more on short-term Treasurys to fund the government. Many on Wall Street credit that approach with calming markets buffeted by sticky inflation and a swollen federal budget deficit.

Key members of the Trump administration, however, have expressed hostility to the strategy, characterizing it as a risky effort to juice the economy. Those include freshly confirmed Treasury Secretary Scott Bessent and Stephen Miran, the president’s choice to chair his Council of Economic Advisers.

Investors have generally welcomed Bessent’s appointment, seeing the former hedge-fund manager as a potential moderating influence on President Trump on issues such as deficit spending and tariffs.

Still, some worry that he might ramp up issuance of longer-term debt, or “duration” in Wall Street parlance, putting upward pressure on already elevated U.S. Treasury yields—a key benchmark for borrowing costs throughout the economy. That has raised the stakes for Wednesday’s release of the Treasury’s quarterly borrowing plans. …”
 
“…
Investors care about the federal deficit because filling a larger budget shortfall requires selling more Treasurys. That can drive down the prices of existing bonds, pushing yields higher.

Details matter, however. Borrowing in T-bills—debt that matures in a year or less—typically has little impact on the 10-year Treasury yield, which is what moves things like mortgage rates.

Investors don’t expect Treasury to change the size of its note and bond auctions this week. The agency typically telegraphs such adjustments well in advance and said in October that it didn’t expect changes to longer-term debt auctions “for at least the next several quarters.” …”
 


Will be interesting to see if China retaliates like during Trump 1 when they stopped buying US agricultural products. US had to spend $60 billion to subsidize the farmers and still many small and mid-suzed farmers went out of business. Also wonder if they will use rare earth metal denials this go-round.
 
heelslegup said:


Will be interesting to see if China retaliates like during Trump 1 when they stopped buying US agricultural products. US had to spend $60 billion to subsidize the farmers and still many small and mid-suzed farmers went out of business. Also wonder if they will use rare earth metal denials this go-round.
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From another thread
The Ministry of Commerce and China’s customs administration also announced new export controls effective immediately on more than two dozen metal products and related technologies. Those include tungsten, a critical mineral typically used in industrial and defense applications, as well as tellurium, which can be used to make solar cells.
 
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