After dumping over $6 trillion of additional cash into the economy over a two-year period, the Federal Reserve has stopped the "printing press" -- the money supply has been flat during 2022.  The extra cash has fueled inflation, as we're all experiencing.  But prices still haven't caught up with the expanded money supply, which is why the general ( Read more... )

Once the stock market entered a Bear Market, I started rebalancing my retirement portfolio on a monthly basis, to increase its proportion of stocks.  So, regardless of whatever News Diet I may be on, yesterday I took some time to review inflation, interest rates, stock prices, and so forth, to update my model for the current Bear Market and then ( Read more... )

Not only are interest rates farther below the inflation rate than at any time since 1954 -- meaning "real" inflation-adjusted interest rates are lower than in most people's lifetimes ( Read more... )

Fed raises interest rates by largest amount since 1994 to fight inflation

The Washington Post makes this sound like a big deal, but in 1994 inflation was only 2.6%, now it is over 8%. And in 1994 the overnight interest rate controlled by the Fed was 4.2%, now it is only 1.6%.

Note that back in 1994, the Federal Funds rate was higher than the ( Read more... )

I never bought the spin that Russia was losing its war with Ukraine. Yeah, the initial knockout blow failed to achieve a knockout, but in the south and east it was more clear that Russia was slowly and steadily gaining territory via superior numbers and attrition. The sanctions were never going to stop Russia, and NATO can throw as many weapons ( Read more... )

There had been several columns and news items recently "explaining" how inflation had already peaked, which was fueling optimism in stock & bond markets, but, nope, inflation hit another 40-year high in May -- 8.6% -- and this morning the average gasoline price in the US passed $5/gallon for the first time -- and so far the predicted inflation rate ( Read more... )

President Biden sent his "Plan for Fighting Inflation" to the Wall Street Journal, which duly published it on Monday evening ( Read more... )

By my calculation we're still not in a bear market in US stocks, still not quite, close but not quite, after yesterday's one-day 4% drop. The 20% decline requirement is arbitrary, but I'm not rounding down, I'm waiting until we cross that boundary at both closing and opening bells before I shift into my bear market stance. You gotta be a bear for ( Read more... )

Samira Tafat, a podiatrist who lives in the Paris region, spends most of her day at the wheel, making house calls. Her husband is a taxi driver.

“Our fuel budget is huge, it’s become unmanageable,” she said. “I have three children, I need to feed them.”France already spends most of its GDP on government, it's one of the most socialist rich ( Read more... )

Mortgage rates are already up to 5%, from the 3% we refinanced at last year. The Fed hasn't done much about overnight interest rates yet, but they're talking like they will, so long-term rates have moved up.