Hot inflation sparks DC debate

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DC controversial hot inflation set – I write Here with Victoria Gida May’s sharp rise in prices and what that means for President Joe Biden, the Fed, and the economy. As more supplies come online and workers begin to flood, it will probably all be mitigated. But what it happens is no longer completely clear.

And if all costs from rental apartments to airline tickets skyrocket Used cars can launch broader inflationary dynamics, forcing the Fed to raise rates that hinder growth, while making it much harder for President Joe Biden to push up trillions of dollars with additional federal spending. ..

Via Jack Ablin, Chief Investment Officer of Cresset Capital: “It’s probably time to worry a bit … Obviously, the Fed wants to see some inflation, but one of the mistakes they can make is to make it too hot. And since the economy is completely accustomed to very low interest rates, even the slightest rise from the Fed can roll it over. “

Inflation concerns reignited Thursday Ministry of Labor reported Consumer prices in May rose 5% from a year ago, the fastest pace in nearly 13 years. Excluding volatile food and energy prices, so-called core inflation rose 3.8%, the sharpest rise since June 1992.

White House / Federal is not too worried — The expectation within the White House and the Fed is that much of the inflationary pressure will be eased by eliminating supply chain problems and returning more workers to the retail industry.

White House executives should alleviate the current labor shortage if young, recently vaccinated workers feel more comfortable returning to public jobs in hotels, bars, restaurants and stores. Said that.

Big open question: labor supply — Pantheon’s Ian Shepherdson Email: “[U]It is impossible to quantify the risk of the impact of wages in the second round until more information about the labor market (how many participants will increase in the fall) is available. However, it is more likely to taper off by the end of the year. There is no justification for continuing quantitative easing against this background. ”

Good friday morning — Everyone, Happy Weekend.Please email me [email protected] Follow us on Twitter @morningmoneyben.. Email Aubree Eliza Weaver [email protected] Follow her on Twitter @AubreeEWeaver..

President Biden heads to Carvis Bay, Cornwall, England for the G7 Summit … University of Michigan Consumer Psychology at 10 am is expected to rise from 82.9 to 84.2 …

Republicans are using IRS leaks to rip government agency Biden plans —Our Aaron Lorenzo: “Republican Ways and Means Commission… Leakage of tax information about wealthy Americans like Jeff Bezos, Elon Musk, and other millionaires undermines confidence in the IRS, President Joe Biden He said he should disqualify the proposal to support the execution of the agency.

“The panel’s Republicans, without quoting evidence, blamed IRS insiders for criminal breaches of personal taxpayer data and suggested timing instability. Republicans have suggested IRS funding. He is slamming with Byden and Congressional Democrats on the administration’s plans to increase the number of people, demanding that banks report their account information to government agencies.

Infrastructure trading or no trading? — Our Burgess Everett and Marianne Levine: “When we left Washington, DC on the weekend, Senator drew a confusing picture of the status of infrastructure negotiations. Some are skeptical.

“Sen. Mitt Romney A member of the bipartisan negotiation group (R-Utah) said the negotiations were “in the middle stage” … Senator John Tester (D-Mont.) Has not agreed with the Centrists. “We may do so,” he said. The remaining long-standing disagreement about spending and how it is paid. …

“10 negotiating crews run by Sens. Kyrsten Cinema (D-Arizona) and Rob Portman (R-Ohio), sources from both parties have not yet reached an agreement.But they believe they are approaching a framework that they can present to majority leaders. Chuck Schumer And minority leaders Mitch McConnell

Stocks end higher — AP’s Alex Veiga: “Healthcare and tech companies helped raise stock prices on Thursday, raising the S & P 500 index to a record high and breaking out of the deficit this week.

“The Benchmark Index has risen 0.5% and is on track for the third straight week of growth. Bond yields initially rose, but following the long-awaited report of a significant rise in inflation last month. Most have dropped. ”

GAMESTOP FALLS 27% — Reuters Aaron Saldanha, Sagarika Jaisinghani, Sinéad Carew: “GameStop Corp shares lost more than a quarter of their value on Thursday, and other so-called meme shares were put up for sale, and a wide range of names became popular. Investor.

“Video game retailers’ stocks fell 27.16% to $ 220.39, the largest daily loss rate in 11 weeks. GameStop could sell up to 5 million new shares in its quarterly report. The day after he said, the fall occurred, raising concerns about potential dilution for existing shareholders. ”

Wall Street faces all the same reflation allegations after the CPI beat — Bloomberg’s Sam Potter and Anchalee Worrachate: “After weeks of drift and suspicion, Wall Street was looking for a definitive signal about price increases to help get refre trading back on track.

“Instead, another mixed message arrived. Prices paid by US consumers rose at the fastest pace since 2008 in May, but details of data released Thursday show that the jump is temporary. He supported the Federal Reserve’s view that it would be a thing. ”

Inflation is the highest in 13 years — WSJ’s Gwynn Guilford: “The recovery of the US economy from a pandemic has caused the biggest inflation surge in almost 13 years, with consumer prices rising 5% in May from a year ago.

“The Ministry of Labor said last month’s rise in the consumer price index was the largest since August 2008’s measurements rose 5.4%. The core price index excludes the frequently fluctuating categories of food and energy. Was up 3.8% year-on-year in May, the largest increase since June 1992. ”

But hotter inflation couldn’t shake the market out of turmoil — Reuters Karen Pielog: “Investors haven’t been surprised by the surge in US inflation over the past two months, and have made the market speculate on how the Federal Reserve defines’temporary’. Nevertheless, they are confident that they are skillfully handling the recovery of economic growth. “When it talks about price increases.

“In fact, Wall Street’s benchmark index hit a record high after a few days of sideways trading. The Consumer Price Index (CPI) in May was in 2013, according to a Thursday Ministry of Labor report. After showing the largest year-on-year rise, US Treasury yields fell. Year. ”

And rising inflation has given momentum to the Fed’s policy shift. — WSJ’s Paul Kiernan: “The recent surge in inflation has given Federal Reserve Board officials more reason to begin discussing the final reduction in pandemic-led monetary easing policies at next week’s meeting.

“As the Fed is trying to help the labor market recover, more economists are worried that the Fed may lag behind the inflation curve. If that happens, the central bank will be economists and markets. Participants will have to tighten policies more rapidly than they currently expect, damaging the economy and fueling market volatility. ”

ECB continues to stabilize policy despite economic recovery — NYT’s Eshe Nelson: “Despite the rapid improvement in Europe’s economic outlook, European Central Bank policymakers decided on Thursday to maintain a“ very accommodative ”financial stance. Central bank governor Christine Lagarde said at a news conference that the government had lifted blockade restrictions, accelerated vaccine deployments, and led to a recovery in the service industry and “continuous dynamism” in the manufacturing industry.

FED BLANACE sheet exceeds $ 8T for the first time — Reuters Kate Dugit: “The Federal Reserve Board’s balance sheet exceeded $ 8 trillion for the first time, according to weekly data held by the US Central Bank on Thursday.

“The report also announced that the Fed seems to have sold about $ 160 million in corporate debt since Monday. After the announcement, it unleashed a corporate credit portfolio of about $ 14 billion. As a first step, the central bank Started selling shares in 2016. Monday’s bond exchange trading fund. ”

Last year, many Americans moved to the cheaper housing market —AP Alex Veiga: “Many Americans who moved last year moved to areas with larger and cheaper homes on average. According to Zillow, people who moved to another city in 2020, on average, moved to another city. The average home price is now nearly $ 27,000 lower than the previous zip code. ”

Goldman requires employees to report vaccination status — NYT’s Lauren Hirsch: “Goldman Sachs wants to know how many of its employees got Covid-19 shots. Banks have vaccinated US employees this week until noon Thursday. I have sent a note notifying you that you need to report.

Transition — The BGR Group has appointed Andy Lewin as Co-Head of Financial Services Operations. Lewin joins former Republican Congressman Sean Duffy in this role.

Hot inflation sparks DC debate

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