Inflation

Falling gasoline prices put a dent in the July inflation rate, which fell to 8.5% from 9.1% in June. But other costs such as housing continue to climb, ...

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The slowdown coincides with a series of rate hikes from the Federal Reserve.

While food and shelter costs increased over the last month, the gasoline index price fell 7.7% in July to offset those increases. The heightened wage increases match a pattern that stretches back months. Individuals who responded to the July survey said they expect inflation to run at a 6.2% pace over the next year and a 3.2% rate for the next three years, both of which marked significant declines from the inflation expectations expressed by consumers in the month prior. On a monthly basis, the consumer price index rose 1.3% in July, remaining unchanged from the rise seen in June, according to the bureau. The consumer price index, or CPI, rose 8.5% over the past year as of July, a marked slowdown from 9.1% in June, according to the Bureau of Labor Statistics. A slowdown in the inflation rate emerged in part because the national average price of gasoline, which makes up a key portion of the consumer price index, has declined for more than 50 consecutive days, according to AAA.

Consumer Price Index inflation cooled meaningfully in July as gas prices declined, which is good news for the Federal Reserve, though not yet enough for ...

The Fed raised interest rates by three-quarters of a percentage point in both June and July, and officials have signaled that another one of those abnormally large increases should be up for debate at their upcoming meeting on Sept. 20-21. Despite all those positive developments, costs continue to climb rapidly across many goods and services. +0.6 +0.6 +0.6 While costs finally stopped increasing at an accelerating rate, they are still climbing at an unusually rapid clip, making everyday life expensive for consumers.

Falling gasoline prices are clearly giving American consumers some inflation relief.

By the numbers: Gasoline prices fell 7.7% in July, dragging down headline inflation. They fled the scene after a response from special agents. That compares to a 9.1% year-over-year reported in June.

Falling gasoline prices put a dent in the July inflation rate, which fell to 8.5% from 9.1% in June. But other costs such as housing continue to climb, ...

"It wasn't enough to combat inflation and the rising cost of food," he says. "It's certainly not the most ideal arrangement, but with what's going on in today's day and age, you have to do what you have to do." Rising rents and home prices are reflected only gradually in the Labor Department data, and those costs tend to be more persistent than volatile food and energy prices. "But compared to what we were paying before everything started with the war in Ukraine, it's still a high cost." "Even if individuals feel like they're losing ground relative to inflation, that extra income is supporting demand," keeping upward pressure on prices. "It's something we all notice, front and center, every day." But core prices rose just 0.3% between June and July — the smallest increase in four months. "I finally moved over to a different job where yes, I'm going to be getting paid $3 or $4 more an hour," she says. The Dow Jones Industrial Average rose more than 450 points in the first hour of trading. When it comes to inflation, the good news is that gas prices are dropping. Sutton also worries about the high cost of groceries and especially housing. "It's tough to get to the end of the week before you get paid and you're out of food and you're digging out of the freezer to try to find something."

Rising inflation poses a growing challenge for the Federal Reserve, which has committed to reining in soaring prices while trying to avoid plunging the ...

Housing is also a big component of the CPI, given that mortgage or rent payments are often a family's biggest monthly expense. sharply, increasing by 1.1% over the month and rising 10.9% on a year-over-year basis, the largest increase since May 1979. "It is difficult to estimate how high this peak will be," he said. In July, lower gas prices effectively canceled out higher prices for food and housing. "By next year, I expect labor scarcity and wage pressures to be less of a factor for inflation than they are right now," Adams said. "I think in the near term, the labor scarcity kind of puts a bottom on how far inflation can fall," Adams said. However, shelter costs are still up 5.7% year over year. Food at home spiked by 13.1% on a year-over-year basis. The jump in home prices has largely locked out many young adults and other would-be buyers who don't have existing home equity to put toward the purchase of a new house. "It's stickier and it's harder to fix than some of the other pressures," Mayfield said. The rate of increase in housing costs also moderated slightly, with the rise in overall shelter costs, rent and owners' equivalent rent each down by a fraction of a percentage point from the previous month. The months' worth of increases in the CPI poses a growing challenge for the Federal Reserve, which has committed to reining in soaring prices while trying to avoid plunging the economy into a recession.

Investors, consumers and economists generally expect inflation to decelerate after the Federal Reserve raised its benchmark rate by 75 basis points in ...

PredictIt — an 8-year-old trading hub where thousands of Washington insiders and politically savvy investors wager on everything from whether President Joe Biden will be his party’s 2024 nominee to who will win the San Jose mayoral election — will shut down in the U.S. in February after the Commodity Futures Trading Commission said it failed to comply with market rules.” WHERE IT’S AT — WSJ’s Sarah Chaney Cambon: “Workers’ wages are rising briskly, a factor contributing to four-decade high U.S. inflation … Wage gains help consumers spend money in the face of higher prices for restaurant meals, groceries and lodging. FLAGGING INTEREST — WSJ’s Paul Vigna: “Coinbase Global Inc. reported a surprisingly large second consecutive quarter of losses, driven by the crypto market’s spring meltdown … The number of active users fell. Easy money from venture capital dealmaking is fast evaporating in an inflation-induced high interest-rate environment as many private investors take a hard look at funding startups, many of which could be years away from turning a profit.” What’s more, if those declines aren’t matched by similar downturns in “core inflation” — a gauge that measures prices without factoring in volatile food or energy costs – both the Fed and the economy will be in for a very challenging next several months. Last month, the Italian outlets of the American pizza conglomerate extinguished their pizza ovens. In June, real earnings — or average hourly earnings when accounting for the cost of living — dropped by 1 percent as prices hit record highs. Inflation is expected to subside somewhat, Gapen tells Morning Shift: “The headlines should be super soft … because we expect payback in energy” as gas prices finally recede. The median plan lost 7.9 percent for the 12 months ending June 30, according to data shared with POLITICO Tuesday by investment analysis firm Wilshire Trust Universe Comparison Service.” The question is, how big of a drop will we actually see? Consumers have told the New York Fed that they no longer expect inflation to be quite as bad as they did as recently as June. Act on the news with POLITICO Pro.

July's Consumer Price Index numbers show inflation is slowing down. But higher prices for many goods and services could be in store for a while.

Krause said she recently noticed that the price of a loaf of bread she usually buys every week rose by $1, and ground beef that used to cost $10 has increased to nearly $14. “Food and fuel are two of the more volatile components in the inflation basket. “Wage growth and labor income tend to be the biggest drivers of those gains,” Sharif said. If average wages are rising and outpacing the rate of inflation, that means that many Americans could afford to buy more even if prices are increasing. Food and gas prices, which tend to be more volatile, are also more likely to fall compared to other goods. Edelberg said there were “huge unknowns,” such as how the war in Ukraine continues to affect energy costs, which would impact the cost of transporting goods to stores. “If wages keep growing quickly and price growth slows, people would be more able to afford things than they were before all of this,” Furman said. Retail gas could conceivably continue to fall in the future, possibly below $3 a gallon, because fuel prices tend to be more volatile. Services, on the other hand, typically get more expensive over time and are slower to change in price. Decreased spending could lead to a slowdown in hiring and business investment, meaning that more workers could be laid off and wage gains could slow. But just because prices as a whole will continue to rise doesn’t mean that everything will be this expensive forever. It just means that prices as a whole will level off and increase more slowly, rather than continuing to skyrocket.

Prices have increased rapidly since last year, but barely budged in July — a positive development, though not yet enough for a victory lap.

“It can’t just be a one month: Oil prices went down in July, that’ll feed through to the July inflation report, but there’s a lot of risk that oil prices will go up in the Fall.” Investors interpreted the unexpectedly pronounced slowdown in July inflation as a sign that policymakers are likely to raise rates by half a point, rather than making a third three-quarter point increase. Some small part of the nascent slowdown in consumer prices could also tie back to the Fed’s rapid interest rate increases this year, which are meant to cool down consumer demand and slow business expansions. As pressures on inflation remain, Fed officials have said that they will not be quick to pivot away from their effort to wrestle it lower. A range of commodity prices have dropped in recent months, and gas in particular is becoming cheaper. The marked deceleration in overall inflation — on a monthly basis, prices barely moved at all — is another sign of economic improvement that could boost President Biden at a time when rapid price increases have been burdening consumers and eroding voter confidence. That trend should translate into less pricing pressure on goods in the months to come, but it’s hard to tell how big the effect might be. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys. The slower price increases are also likely to reassure the Federal Reserve, which has been waiting for any sign that inflation is starting to moderate. Policymakers have been hoping for more than a year that price increases will begin to cool, only to have those expectations repeatedly dashed. The slowdown in overall inflation stemmed from falling prices for gas, airfares, used cars and hotel rooms, which canceled out increases in critical areas like food and rent. There have been recent signs of progress on at least two of these fronts, with gas prices falling and supply chain strains showing some improvement.

July's inflation rate saw an unexpectedly large drop, driven by the price of gas. This could be the beginning of the end of the era of high prices.

The clearest thing that can be taken away from this report is that the most extreme part of this inflationary era (expressed in the rise in prices and the action from the Fed) is probably done. Practically, this is only a small easing in pressure on the money supply, but if this is in fact the path that the Fed takes, it’s a symbolically significant move that shows not only that the worst is over, but that its plans are working. Yes, people have been able to keep pace somewhat by switching jobs and getting better pay, but whatever increase in paychecks that people have been able to secure has largely been outstripped by the rising price of gas, groceries, and shelter. At the last two meetings, the central bank hiked rates by 0.75 percent, which are historically steep rates, in order to tighten the flow of money and ease up on the pace of expansion. Since February, the price of oil and gas have basically been driving the rise in prices — which peaked in June at a 9.1 percent annual increase — but you’ve probably noticed the pain everywhere: rents rising to unaffordable levels; the price of meat and cereals increasing; even getting a plumber or a babysitter can make you double-check your account balance. It’s too early to call it, but the long period of inflation that has plagued the U.S. economy may finally be sputtering out.

The energy sector, particularly gasoline prices, have played a huge role in soaring inflation rates. Compared to last year, energy prices were up 41% in June ...

Double the number of homes have a price reduction compared with last year, and while rent is still going up, increases are slowing. Though used car prices showed signs of easing early in the summer, they still remain historically high and will probably remain so for the near future. “Even though, directionally, things are improving, there’s still a long way to go,” House, the Wells Fargo economist, said. The process of taming inflation is unpleasant. Analysts are predicting that the low number of new car sales, which dropped 12% year-over-year in July, will continue through the end of summer as the supply of cars continues to be sparse. The average price of rent in June went up 5.8% over the previous year. In July, Americans were paying 10.4% more for new vehicles and 6.6% more for used cars compared with the year before. Like the energy market, the food sector is highly volatile as it is also sensitive to geopolitical relations and climate. A number of factors went into rising food prices, including a highly infectious avian flu that wiped out many chickens across the country. There are signs of relief, at least in the near future. The energy sector, particularly gasoline prices, have played a huge role in soaring inflation rates. Nor is declining overall inflation a guarantee that prices will not rise in some areas again.

The Consumer Price Index climbed 8.5 percent in July, a bigger slowdown than expected, but inflation may remain uncomfortably high for some time.

Fed officials are highly attuned to that risk, and often cite rent as a factor that could keep inflation higher. The price of food has been driven up this year by soaring costs for farm expenses like fertilizer and gasoline, as well as the Russian invasion of Ukraine, which has sowed chaos in commodity markets. The more rapid pickup could make it harder for the Federal Reserve to return overall inflation to the low levels that prevailed before the coronavirus roiled supply chains and Russia’s war in Ukraine upended commodity markets, even if those problems stop pushing inflation so much higher. That spells trouble for economic policymakers, because housing-related costs are slow to change course and make up nearly a third of total inflation. The drop reflects a number of factors: Weaker demand because high costs have kept some drivers off the roads; a decline in global oil prices in recent months; and a handful of states suspending taxes on gasoline. Fares are expected to stay below $300 through September, before rising again, to a peak of $373 in November, up 24 percent from the same month in 2019, Hopper said. Elevated demand along with persistent shortages and delayed deliveries for some products have helped push up the prices of cars, toys, furniture, food and other goods. The Fed raised interest rates by three-quarters of a percentage point in both June and July, and officials have signaled that another one of those abnormally large increases should be up for debate at their upcoming meeting on Sept. 20-21. Doing so will give you access to the work of over 1,700 journalists whose mission is to cover the world and make sure you have accurate and impartial information on the most important topics of the day. After stripping out food and fuel costs to get a sense of underlying price pressures, prices climbed by 5.9 percent through July, matching the previous reading. We’d like to thank you for reading The Times and encourage you to support journalism like this by becoming a subscriber. The prospect of U.S. interest rates not rising as high as previously thought also pushed down the dollar, which fell more than 1 percent against a basket of currencies of major trading partners.

Full coverage of the July CPI report and the markets.

U.S. Federal Reserve Board Chairman Jerome Powell speaks during a news conference at the headquarters of the Federal Reserve, July 27, 2022 in Washington, DC.

So I think it's a little bit early to be revising the Fed's forecast based on a number that may not be repeated next month." "And we're not seeing that: Some of the sharpest increases in categories like necessities continue, with food prices up at the fastest pace in 43 years." "Whatever progress we've seen has to be sustained a month from now, when we get the August CPI report," he says. These hikes increase the cost of borrowing, which can slow down economic growth. However, prices remain elevated overall in broad categories like shelter and food. - Food at home: 13.1%

Consumer Price Index inflation cooled meaningfully in July as gas prices declined, which is good news for the Federal Reserve, though not yet enough for ...

The Fed raised interest rates by three-quarters of a percentage point in both June and July, and officials have signaled that another one of those abnormally large increases should be up for debate at their upcoming meeting on Sept. 20-21. Despite all those positive developments, costs continue to climb rapidly across many goods and services. +0.6 +0.6 +0.6 While costs finally stopped increasing at an accelerating rate, they are still climbing at an unusually rapid clip, making everyday life expensive for consumers.

Money is exchanged at a food stand while workers wear face masks inside Grand Central Market on Wednesday, July 13, 2022, in Los Angeles.

In the U.K., inflation soared 9.4% in June from a year earlier, a four-decade high. Last month’s modest slowdown in inflation might enable the Fed to slow the pace of its increases in short-term rates when it meets in late September — a possibility that sent stock prices jumping. Still, Fed Chair Jerome Powell has emphasized that the central bank needs to see a series of lower readings on core inflation before it will pause rate hikes. There are other signs that inflation may fade in coming months. Last month’s declines in travel-related prices helped lower core inflation, a measure that excludes the volatile food and energy categories and provides a clearer picture of underlying price trends. That’s mostly because of higher gas prices but also because it’s now using more trucks to keep up with the demand for food. Bread prices leaped 2.8% last month, the most in more than two years. Average paychecks are rising faster than they have in decades, but not fast enough to keep up with inflation. And even if price increases continue to weaken, they are a long way from the Fed’s 2% annual target. “The people here were stretched already.” Airfares are still nearly 30% higher than they were a year ago. Inflation has slowed in the recent past only to re-accelerate in subsequent months.

While fuel costs, gas prices in particular, have eased in recent months, the core annual inflation rate that strips away those more volatile elements such as ...

"I think we just need to maintain a sense of uncertainty and wait for the data as it comes," Summers said on MSNBC. "I still think we have a very serious inflation problem in this country. I don't think that inflation problem is going to go away on its own volition. But in the things that you can't cut back on -- where you live, what you eat ... those are things that I'm concerned about." And so, I think we're likely to have some quite turbulent times ahead. Housing, the largest single expense in most households, is a driving factor. It's better at the gas pump than it was." Consumers are pessimistic about what lies ahead, but they keep spending. CNN's Vanessa Yurkevich went to a Philadelphia grocery store to talk to shoppers about the costs. You'll learn a lot from her report Gas prices were down 7.7% from June to July, but they are still up 44% compared with a year ago. Solomon said a single report like Wednesday's may not affect the Federal Reserve's aggressive anti-inflation plan to raise interest rates. "Especially in meats, dairy," he said.

If inflation has been the biggest threat to U.S. economic growth, then July's data should provide signs that there's at least some relief in the pipeline.

But there were few other signs of inflation declines in the report, with food costs particularly high. Most of the tempering in inflation came because of a fall in energy prices. "When you start to look at specific categories, there's been a lot of shifting in spending, and as a result, some categories are being impacted more than others by inflation," he said. "Consumers may get a holiday present of some relief on food prices." Now we're seeing even more people turn to food pantries because of the rising prices." The Atlanta Federal Reserve's GDPNow gauge, which tracks economic data in real time, pointed to a 2.5% growth rate in a Wednesday update, up 1.1 percentage points from its last one on Aug. 4. That marked the first time the aggregate measure hadn't posted a month-over-month increase since May 2020, when the widely followed index showed a modest decline. Gasoline slid 7.7%, the biggest monthly decline since April 2020. "The whole recession narrative really needs to be put on a shelf for now," said Aneta Markowska, chief economist at Jefferies. "I think it's going to be shifting to a stronger-for-longer narrative, which is really supported by a reversal in inflation." However, Markowska also expects pressures to intensify in 2023, with a recession likely in the back part of the year. - However, there were few other signs of inflation declines in the report, with food costs particularly high. - "The whole recession narrative really needs to be put on a shelf for now," said Aneta Markowska, chief economist at Jefferies.

Inflation didn't rise between June and July according to new figures from the Labor Department's consumer price index (CPI), the first numbers in some time ...

On the other side of that coin, it also means that real wages have been continuing to fall for most workers.” “The fact that core inflation has held steady,” he added, “is encouraging, because it suggests that supply and labor costs are certainly not adding to inflation. “We knew gas prices were way down and that was going to have a large effect on headline [inflation]. The core number was a bit better than we expected, than people expected. Gerald Epstein, an economist at the University of Massachusetts, said in an interview that there’s reason to think prices will remain high. “It does seem like these numbers show that inflation is starting to moderate,” Epstein said. In fact, the new figures, while unchanged from June, were 8.5 percent higher than they were a year ago.

For some time now a shortage of refining capacity has pushed up gasoline and fuel oil prices faster than those on crude oil. The July drop in retail energy ...

Part of July’s break in “core” inflation reflected a 0.5% drop in the prices of transportation services, a direct result of the drop in energy prices that, as already indicated, will not likely persist. The price of a barrel of benchmark West Texas Intermediate grade hit a low of $88.54 at the beginning of August. Since, it has risen to $91.41 a barrel. July showed a monthly gain of 0.3% or a 3.7% annual rate. This measure between April and June rose between 0.6% and 0.7% a month or at a 7.8% average annual rate. The stock market took the news to heart, so much so that the benchmark S&P 500 Index rose 1.7% on the opening bell. July brought a measure of relief on the inflation front.

The unpredictability of rising prices is what confounds businesses, consumers and the Fed. Fewer small ...

Even if the outlook seems to be improving, the Federal Reserve and financial markets are still flying somewhat blind, which means the odds of a policy mistake remain high. But the true turn for the better will come when inflation ceases to be shocking altogether — positively or negatively — and can fade into the background once again. The consumer price index rose 8.5% in July from the same month a year earlier, the Labor Department reported on Wednesday, less than the median estimate of 8.7% in a Bloomberg survey.

Alter Medicare Part D's structure to cap out-of-pocket costs for beneficiaries and expand eligibility for Low-Income Subsidies in Medicare Part D. Repeal the ...

Beginning in 2025, Medicare Part D will undergo a substantial redesign with the introduction of a lowered out-of-pocket maximum for beneficiaries and the elimination of the coverage gap. Or, if it would result in a lower price, the MFP for Part B drugs is the price paid by Part B the year prior to being selected, and for Part D drugs would be the average of the prices negotiated by Part D plans net all price concessions received by the plans. If a beneficiary in the initial coverage phase is dispensed a drug subject to the price-setting requirements, Medicare must provide the plan with a subsidy equal to 10 percent of the drug’s MFP. The benchmark year for currently approved Part D drugs is 2021. This penalty will take the form of a rebate to Medicare on all units sold in Parts B and D at an amount over the allowed price increase. Part B drugs that are currently approved would have Q3 of 2021 as their benchmark quarter, while drugs approved after December 1, 2020, would have the third full quarter after their approval as a benchmark quarter. Part D drugs approved after October 1, 2021, will use the first calendar year following approval as their benchmark year. Manufacturers who are found to have violated the terms of the agreement or who fail to offer the MFP to a Medicare beneficiary will face civil monetary penalties up to 10 times the difference between the MFP and the price charged. The IRA sets a “maximum fair price” (MFP) for all drugs selected that will based on a specified percentage. Drugs must be selected by the Centers for Medicare and Medicaid Services (CMS) and an agreement reached with the manufacturer two years before the new price will apply. The IRA also includes language that will require Medicare to set prices for select drugs, a process the legislation calls “ negotiation.” Drugs will be initially selected in 2023 and the prices set will be applied beginning in 2026. These premium tax credits will ensure that beneficiaries getting their insurance coverage through the marketplace exchanges will receive subsidies so that a second-lowest cost Silver plan will cost the individual no more than 8.5 percent of household income.

On Sunday, the Senate passed the Inflation Reduction Act. The legislation will be voted on in the House on Friday and is expected to pass.

The enhanced credits provided by the American Rescue Plan Act significantly reduce premiums for marketplace enrollees with low and middle incomes and cap premiums at 8.5% of income for all enrollees; without this new bill, the policy will expire at the end of 2022. Create jobs and economic growth concentrated in clean energy. Drug price negotiation will focus on the highest expenditure drugs that have been on the market for nine to 13 years. In addition, cost sharing for vaccines will be reduced to $0. This cap will take an incredible weight off of the shoulders of older adults who are often living on a fixed income. Reduce climate pollution by 40%: Keeping President Biden’s promise to make the United States a global leader in the fight against climate change. Once the process is completed, the legislation will represent a significant victory for working families.

Stocks are closing at three-month highs on Wall Street as investors cheered a report showing inflation cooled more than expected in July.

But Wednesday’s data nevertheless rejuvenated Wall Street, which staggered after a stronger than expected jobs report Friday that raised expectations for a more aggressive Fed. It bolstered hopes that a peak in inflation — and thus in the central bank’s most aggressive rate hikes — may be on the horizon. The Federal Reserve will get a few more highly anticipated reports before its next announcement on interest rates Sept. 21, which could also alter its stance. Recession worries have built as the highest inflation in 40 years squeezes households and corporations around the world. Cruise lines and other travel-related companies also made big gains. The data encouraged traders to scale back bets for how much the Fed will raise interest rates at its next meeting. Prices for bonds soared immediately after the inflation report’s release, pulling their yields lower. To be sure, inflation is still painfully high, and the expectation is for it to stay so for a while. Tall cans of AriZona iced tea have cost 99 cents since 1992. Netflix, a formerly highflying and high-growth stock that has plunged to be this year’s worst in the S&P 500, was up 6.1%, though it remains down nearly 60% for 2022. Such differences may not sound like much, but interest rates help set where prices go across financial markets. The Fed and other central banks have been hiking rates to slow the economy in hopes of stamping out inflation, but they risk choking it off if they move too aggressively. They now see a hike of half a percentage point as the most likely outcome, according to CME Group. A day earlier, they were betting on a more aggressive hike of 0.75 of a percentage point, the same as the last two increases.

Here's how policies to slow global warming can also shield consumers from rising prices.

For now, economists I’ve spoken to agree that the effects of climate change on inflation are usually regional. Taiwan is a major supplier of chips, so a drought there contributed to a shortage that seriously hobbled the auto industry. Millions of households in India don’t have access to piped water. The transition to cleaner energy needs time. “For fossil fuel, most of the expense is the commodity. One panel is now preserved in the National Museum of American History. Again, the imbalance will very likely lead to higher prices. Economists still don’t fully understand all the ways these disruptions might cause inflation to ripple through our globalized economy. Carter lost the 1980 presidential election in a landslide and his successor, President Ronald Reagan, had them removed in 1986. In the late 1970s, for instance, sharp reductions in Middle Eastern oil exports made energy prices surge in the United States. At one point, inflation rose to 9 percent. (In case you don’t remember, Senator Joe Manchin III cited inflation as a big reason for not supporting an earlier version of the bill.) Carter and his advisers knew that investing in renewable energy was one way to shield consumers from inflation.

Inflation decelerated by more than expected in July, but that doesn't mean our era of fast-rising prices – or Fed rate hikes – is over.

- "The market seems to be taking comfort in the fact that we're seemingly past peak inflation and we should continue to see declines in the second half of the year. The Fed will have another inflation report before September's FOMC meeting and if August's inflation report is as good as this one, we could expect a 50 basis point hike instead of a more aggressive increase in rates." If we see future months' data showing a decrease in inflation, then it will help markets see the end of the tunnel in terms of rate hikes." This is really good news and decreases the odds ofstagflationsand the need for a big recession to break the back of embedded inflation." While the Fed has hiked interest rates by 225 bps already this year, the market is pricing in an additional 117 bps of hikes still to come in 2022." The report will go some way to offsetting the impact of the strong July jobs report in the Fed's eyes, though policymakers will need to see more convincing evidence that inflation is heading toward the 2% target. - "Markets are enjoying the CPI report suggesting that inflationary pressures are easing, and the trajectory is moving in the right direction. - "The decline in Inflation, which peaked a few months ago, is now showing up in the headline data in a meaningful way. However, a 75bp hike remains on the table, given that the Fed will have several more data points in hand, including new employment and CPI reports, before the decision." - "July core CPI rose by 0.31% month-over-month, below expectations and the slowest monthly pace since September. Declines in airfares and used car prices contributed to the slowdown, and we also note a sequentially slower but still elevated pace of shelter inflation. - "Unlike the previous two CPI reports, today's CPI release provides some welcome news for members of the FOMC. That said, monetary policymakers have made clear that they need to see clear evidence of a sustained slowdown in inflation before pivoting on monetary policy. - "The July CPI report is a welcome relief for the economy.

Richard Stern is a senior policy analyst in the Grover M. Hermann Center for the Federal Budget at The Heritage Foundation.

The costs would instead be passed on to everyone else through increased drug prices, reduced drug production, and slashed research budgets to produce new lifesaving drugs. In sum, the misnamed Inflation Reduction Act strikes at rich and poor alike and would adversely affect every American family. The bill would increase by roughly 50% the fees imposed on domestic oil producers on federal lands. And yet, policies the left has put forward to cut greenhouse gas emissions and eliminate conventional energy would waste more than $7.7 trillion and nearly double gas prices, according to modeling by The Heritage Foundation. In other words: All pain, no gain. The stock-buyback tax would trap capital with established and less dynamic companies, preventing those funds from being reinvested in innovative and dynamic ventures. These deficits would need to eventually be paid back through either new taxes or more inflationary creation of money by the Federal Reserve. In the current economic climate, these deficits would result in even more inflationary pressures. This bill likely would increase federal inflationary deficits by at least $350 billion over the next decade. Those burdens would be felt through reduced paychecks and job opportunities, slower economic growth, and increased consumer prices. In reality, it would mean costly audits for Americans from all walks of life, further political targeting, and federal nitpicking over every operation done by small businesses. The unwarranted, unconstitutional, and autocratic FBI raid on former President Donald Trump’s Florida home on Monday lays bare for all the world to see the true purpose of this provision. Having time and time again championed these policies after each unmitigated failure, President Joe Biden is yet again peddling another reckless round of central planning with your family in the crosshairs.

BANGKOK (AP) - Shares advanced Thursday in Asia after benchmarks closed at three-month highs on Wall Street as investors cheered a report showing inflation ...

Those include data on hiring trends across the economy, due Sept. 2, and the next update on consumer inflation, coming on Sept. 13. The inflation data encouraged traders to scale back bets for how much the Fed will raise interest rates at its next meeting. Recession worries have built as the highest inflation in 40 years squeezes households and corporations around the world. In Thailand, the SET picked up 0.4% after the country's central bank raised its benchmark interest rate by 0.25 percentage points to 0.75% a day earlier. The S&P 500 surged 2.1% on expectations that slower inflation will mean the Federal Reserve may moderate its interest rates hikes. The Federal Reserve will get a few more highly anticipated reports before its next announcement on interest rates, on Sept. 21. Wall Street is closely watching to see if the Fed can succeed in hitting the brakes on the economy and cooling inflation without veering into a recession. The U.S. dollar rose to 133.03 Japanese yen from 132.93 yen late Wednesday. The euro slipped to $1.0293 from $1.0300. Other reports this week will show how inflation is doing at the wholesale level and whether U.S. households are still ratcheting down their expectations for coming inflation, an influential data point for Fed officials. Technology stocks, cryptocurrencies and other of the year's hardest-hit investments were some of the day's biggest winners. Technology stocks, cryptocurrencies and other investments that have been among the year's biggest losers due to the Fed's aggressive rate hikes led the way. The Nasdaq composite, whose many high-growth and expensive-looking stocks have been particularly vulnerable to interest rates, jumped 2.9% to 12,854.80. It's up more than 20% from June.

Rep. Don Beyer said in the House Rules Committee that the United States is not experiencing a recession, despite two negative growth quarters.

Members also feuded over tax provisions of the bill and how they will affect Americans at the onset of a recession. Rules Committee Chairman Jim McGovern, D-Mass., pushed back on that, saying the JCT numbers reflect costs that would be passed to consumers and workers from taxes on corporations. The National Bureau of Economic Research (NBER) has not yet declared the U.S. economy to be in a recession. "Yes, there was a small, small second-quarter dip of GDP, almost completely due to the sell-off of inventory across other businesses." "Using the same tactic, you could also observe a one-month 19.2% increase in electricity! And I was thrilled to see that GasBuddy yesterday said the average price of gasoline in America was under $4 — $3.99," the congressman continued.

A change relating to the corporate minimum tax in the draft legislation that may have adversely affected private equity funds was rejected. Excise Tax on Stock ...

Further, the new tax credit transfer regime has a rule addressing a transfer of an eligible credit by a partnership, but no rules for the subsequent treatment of an eligible credit transferred to a partnership. A “repurchase” includes a “redemption” (generally, any acquisition by a corporation of its stock in exchange for cash or property other than the corporation’s own stock or stock rights) and any other “economically similar” transaction, as determined by the Treasury. Certain repurchases, however, would be specifically excepted from the excise tax. (A publicly traded non-U.S. corporation’s non-U.S. subsidiary that undertakes such an acquisition generally would not be subject to the tax, except in the case of a subsidiary non-U.S. partnership with a U.S. entity as a direct or indirect partner. In addition, the excise tax on corporate stock buybacks applies to stock acquired by a partnership that is majority-owned “directly or indirectly” by the corporation, but the statutory provision itself does not include any further rules for determining such ownership. The excise tax has a potentially broad reach. A special rule would impose the tax on a publicly traded non-U.S. corporation that owns a U.S. entity that expatriated (as determined for U.S. tax purposes) after September 20, 2021. Another special rule would tax certain majority-owned U.S. subsidiaries in connection with certain acquisitions of the stock of their publicly traded non-U.S. parent corporations. As noted above, the Act introduces a one-percent excise tax on certain corporate stock buybacks. A change relating to the corporate minimum tax in the draft legislation that may have adversely affected private equity funds was rejected. The taxable amount is reduced by the fair market value of certain issuances of stock throughout the year. Our previous alert analyzed proposed changes to U.S. tax law that were in an earlier draft of the legislation that was released on July 27, 2022. The action sends the measure to the House of Representatives for a vote as early as Friday of this week.

Finally! A reason for San Franciscans to appreciate the crazy amounts they spend on housing: SF ranked dead last among U.S. metro areas in consumer price ...

The number of layoffs at SF companies in 2022 cracked 9,100 last week, with news that StubHub would close its office in the city and OnDeck cutting back staff. Analysts in the SF Controller’s Office are assessing the countervailing effect of inflation on the city’s coffers. And second, rental prices are not increasing as fast as they are in other metro areas, which keeps overall budget inflation down for SF consumers. My husband and I have both seen large salary, bonus, and stock option increases compared to prior years, well above the inflation rate. The controller’s team regularly updates the city’s progress on its Performance Scorecards and will next assess the impact of inflation and other indicators as part of their fall forecast. Nickelsburg points to the solid job market in San Francisco. With unemployment at 2.2% in the city (see chart below), there’s a surplus of jobs available. What is more concerning locally is the slowdown in startup funding. Data for the San Francisco metro area actually includes most of the northern Bay Area, including Alameda, Contra Costa Marin and San Mateo counties. For now, consumers in San Francisco will welcome Wednesday’s report showing July inflation slightly down from what was hopefully the June peak. The same is true for gas prices: Most city dwellers don’t drive as often or as far as suburban or rural residents across the country. 42% nationally, and the price of “shelter” has only increased 2.3% over the past year. Housing accounts for 52% of a typical SF household budget vs.