Skip to main content

Report on inflation to force the Fed to move more quickly than it would like on raising rates.

ARLINGTON, Va.—Add NAFCU’s chief economist to those who expect last week’s report on inflation to force the Fed to move more quickly than it would like on raising rates.


Curt Long

The most recent numbers show inflation in the U.S. hit its highest point in more than 30 years, according to data released by the Labor Department today.

On a seasonally-adjusted basis, overall consumer prices rose 0.9% in October, with the Bureau of Labor Statistics reporting the overall consumer price index (CPI) grew 6.2% over the 12-month period.

NAFCU Chief Economist and Vice President of Research Curt Long noted that most of the inflation was largely driven by energy prices.

"After three months of more moderate price growth, the October figure matches June for the highest inflation print of the year," said Long.

Energy prices rose 4.8% during the month, following a 1.3% increase in September. From a year ago, energy prices were up 30%. Additionally, food prices climbed 0.9% in October and are up 5.3% compared to this time last year.

Fed Action

"Markets reacted to the news immediately with a bounce in short-term yields as markets anticipate Fed action in the first half of 2022,” Long added.

"The Fed will want to wait longer than that, but inflation must settle at a more comfortable level quickly,” concluded Long. “If price growth continues at its current pace, the calls for action will be too loud to ignore.”

Core prices (excluding food and energy costs) rose 0.6% compared to September. Year-over-year core CPI growth was 4.6%.

Comments

Popular posts from this blog

NCOFCU YouTube Video Minies

  https://www.youtube.com/playlist?list=PLT3lzRTXnHw4YHnT2TzILxP7Rfkjn0eT1  __ ______________________________________________ Check out NCOFCU's additional features: First Responder Credit Union Academy Podcasts YouTube Mini's Blog Job Board

Sunday Reading - 401(k) plans, explained

  Worker Nest Eggs       401(k) plans, explained Originally intended for corporate executives, the 401(k) is now, arguably,   the most famous section of the US tax code   and a staple in worker benefits packages and personal finance guides ( watch 101 ). Roughly 70 million Americans, with a total of more than $7T invested , use these long-term, tax-advantaged accounts to build toward a more secure retirement. Some critics claim that with 401(k) plans, companies offloaded the risk of retirement savings to workers without the training to avoid volatile portfolio mixes. Amid the 2008 financial crisis, many 401(k) plans lost over a quarter of their value , an event that hit those near retirement particularly hard. ... Read our full explainer on the plan...

Why credit unions need to be formulating a strategy for crypto & digital...

“The future of money isn’t coming – it’s here, growing at $4 trillion and accelerating,”  DaLand CIO, Jon Ungerland said in a statement. “Their solution ensures the institutions that matter most to American communities don’t miss the transition.” https://www.dalandcuso.com/videos-podcasts __ ______________________________________________ Check out NCOFCU's additional features: First Responder Credit Union Academy Podcasts YouTube Mini's Blog Job Board

Fed Gets Green Light for Interest Rate Cuts as Unemployment Rate Jumps to 4-Year High

The Federal Reserve is now seen as likely to   cut interest rates   multiple times before the end of the year, following another weak jobs report that showed unemployment jumping to a four-year high. The U.S. economy added just 22,000 jobs in August, less than economists had expected, the  Bureau of Labor Statistics  reported Friday. The unemployment rate rose to 4.3%, up slightly from 4.2% in July but hitting the highest level seen since October 2021, when the economy was still recovering from pandemic-driven layoffs. Although the new jobs report was troubling news for the economy, for prospective homebuyers with secure jobs it likely means further easing in  mortgage rates  in the days to come. Mortgage rates hinge primarily on the yields of  10-year Treasury notes , which plunged Friday to their lowest level since early April, when President  Donald Trump 's Liberation Day tariff announcement sparked panic in financial markets. It signals furth...

The Federal Reserve and How it Works

  The Federal Reserve       Background No institution wields more power in US finance than the Federal Reserve—but opinion polls indicate most Americans  don’t know  what it does. Known casually as “the Fed,” the century-old independent central bank sets interest rates, determining how much ordinary people pay for mortgages, car loans, and more, all to achieve its dual mandate of price stability and maximum employment ( read 101 ). Consisting of a central board of governors working in tandem with 12 regional banks, the Fed also manages the US money supply and acts as the lender of last resort. The Origins of the Fed Throughout the 19th century, the US faced  periodic economic downturns , which resulted in financial panics. Customers raced ...