At the conclusion of the Jackson Hole, Wyoming, FED meeting, Chairman Powell indicated that FED policy was changing. Recent FED History The Federal Reserve Act of 1977 modified the original act that established the Federal Reserve in 1913. The new policy gave the FED a “Dual Mandate” so they would no longer be tasked with just keeping inflation low but would simultaneously try to maintain “maximum employment”. Of course, these are sort of mutually exclusive. If the FED pumps a lot of liquidity into the market, unemployment goes down, but simultaneously inflation goes up, and vice versa if the FED gets too restrictive. So, the FED tried to walk a tightrope between the two extremes and set … [Read more...]
July Inflation Report
The U.S. Bureau of Labor Statistics released its July 2025 Inflation report on August 12th, 2025. The report showed that Annual Inflation was unchanged at 2.7%. Calculated to two digits, it was 2.67% in June and 2.70% in July. So, although the BLS says it was unchanged it was actually up VERY slightly. The market responded positively with the NYSE up 226.57 points. July’s Inflation Prediction: At 2.70%, July inflation numbers came in between last month’s “likely low” and “extreme low” projections, which is about as good as we could hope for. Go here to view our current MIP projection. … [Read more...]
June Inflation Up Again
The U.S. Bureau of Labor Statistics released its June 2025 Inflation report on July 15th, 2025. The report showed that Annual Inflation was up from 2.4% in May to 2.7% in June. Calculated to two digits, it was really 2.35% in May and 2.67% in June. Economists were predicting higher inflation, of 2.6% while our MIP was projecting an "Extreme High" of 2.63%. The NYSE responded by falling about 1% on the day, on fears that this might postpone the FED's rate cuts even further. June's Inflation Prediction: At 2.67%, June's inflation numbers came in slightly above last month's "extreme high" projection. … [Read more...]
FED’s Semiannual Monetary Policy Report
Federal Reserve Chairman Jerome Powell delivered his semiannual Monetary Policy Report to Congress on June 24th and to the Senate Banking Committee on June 25th. Powell noted that U.S. real GDP expanded roughly 2.5% over the past year, supported by resilient consumer spending and a still-solid labor market. Payroll growth averaged about 124,000 jobs per month in the first five months of 2025—slower than the pace seen during the post-pandemic boom but still consistent with a gradually cooling economy. Inflation, however, remains somewhat above target. The Fed’s preferred gauge, core PCE inflation, is running near 2.6%, with overall personal consumption expenditures (PCE) around 2.3%, … [Read more...]
May 2025 Inflation Up Slightly
The U.S. Bureau of Labor Statistics released its May 2025 Inflation report on June 11th, 2025. The report showed that Annual Inflation was up from 2.3% in April to 2.4% in May. Calculated to two digits, it was really 2.31% in April, and 2.35% in May (not even 1/10th% up). And still below the 2.39% in March. Economists were predicting higher inflation, so the slight increase was basically a non-event. Economists were predicting higher inflation, so the slight increase was basically a non-event. May's Inflation Prediction: At 2.35%, May inflation numbers came in at last month's "extreme low" projection, indicating that inflation could have been worse. … [Read more...]
April Inflation Down Slightly
The U.S. Bureau of Labor Statistics released its April 2025 Inflation report on May 13th, 2025. The report showed that Annual Inflation was down from 2.4% in March to to 2.3% in April. Calculated to two digits, it was 2.39% in March and 2.31% in April. Although this month's numbers look good, there is a distinct possibility that low inflation won't last. (See this month's MIP). April's Inflation Prediction: At 2.31%, April inflation numbers came in between last month's "likely low" and "extreme low" projections. … [Read more...]
FED Holds Steady at May Meeting
On May 7, 2025, the Federal Open Market Committee held the FED funds target rate at 4.25% to 4.50%, a level unchanged since December 2024. In his statement, Chairman Jerome Powell said that, while economic growth remains solid, uncertainty has risen markedly amid evolving trade policies and global supply-chain strains saying, “If the large increases in tariffs that have been announced are sustained, they’re likely to generate a rise in inflation, a slowdown in economic growth and an increase in unemployment.” Chair Jerome Powell underscored at the post-meeting press conference that the current policy stance is “in a good place” but that the Fed will “await further clarity” before altering … [Read more...]
March Inflation Down Significantly, But Will it Last?
The U.S. Bureau of Labor Statistics released its March 2025 Inflation report on April 10th, 2025. The report showed that Annual Inflation was down from 2.8% in February to 2.4% in March. Calculated to two digits, it was 2.82% in February and 2.39% in March. Although this month's numbers look very good there is a surprise hidden in the monthly numbers. (See this month's MIP). Inflation Prediction: This is the second month in a row that actual inflation came in slightly below our "extreme low" projection. We had projected an "extreme low" of 2.42% for March, but it came in at 2.39%. Of course, had we been rounding to one digit as the BLS does, it would have been right on the nose of … [Read more...]
BLS: February 2025- Inflation Down
The U.S. Bureau of Labor Statistics released its February 2025 Inflation report on Wednesday, March 12th, 2025. The report showed that Annual Inflation was down from 3.0% in January to 2.8% in February. Calculated to two digits, it was 3.00% in January, and 2.82% in February. On a non-seasonally adjusted basis, monthly inflation was 0.65% in January 2025, and 0.44% in February. This was down from 0.62% in February 2024. Inflation Prediction: As you can see from our MIP projection from last month, February's Annual inflation at 2.82% is just below our predicted Extreme Low of 2.88%. … [Read more...]
Would DOGE Dividend Checks Stoke Inflation?
With all the potential savings DOGE is uncovering some people are suggesting that some of those saving be rebated to taxpayers. Others are saying that doing that would be inflationary in the same way that Biden's stimulus checks were. In this video, Bob Murphy, Senior Fellow of the Mises Institute looks at the implications of this possible rebate. https://youtu.be/NltFVYom1lc?si=knQzinKc45MuuWv4&t=101 Rothbard's Making Economic Sense Bob's Understanding Money Mechanics … [Read more...]