Kevin Michael Miller
Hello, my name is Kevin Miller and I'm interested in all things political. I started http://www.kevinspoliticalblog.wordpress.com in early 2013 but the truth is I've been writing for over a decade now. I live in Chicago, Illinois, am an avid international relations follower and consider myself a Republican. Don't hesitate to comment on my website or even just follow. Thank you in advance for your support. - Kevin M.
The Bureau for Labor Statistics recently reported that the Consumer Price Index Rose 0.3 Percent, for the Month of April. This is in keeping with Wall Street’s Inflationary expectations, coming in better than average.
This is better than the previous two months of the year, which saw a surprise increase in inflationary numbers of 0.4 Percent (February), and 0.4 Percent (March), as well. This decrease in the CPI, the main inflationary gauge for the United States Economy, means that the United States Federal Reserve year belt tightening measures, to combat inflation, appear to be continuing unabated.
And also points to an additional round of rate cuts, which are expected by most economist to occur before the end of Summer.
I’m of the same mind as the esteemed Economist, and Fed Watcher Ethan Harris, of Bank of America. That if CPI, and Core CPI remain relatively high, I actually think that denotes a stronger than average economy, and points to a persistence of the Fed Funds Rate remaining high in the short term, and then only later, towards the middle of next year, beginning to resume its normal inflationary curve. My most pressing issue, as of late has been the softness in the Real Estate Sector, of not only the United States, but in most emerging, and industrialized economies as well.
The most probable cause, and this has to do with Consumer Wages, and Spending, is the presence of higher than normal revolving credit balances, in individual consumer finances, and so the economy as a whole.
The United States, which currently has over $2 Trillion Dollars in Revolving Credit Debt on its consumers balance sheets. Is on par with the amount of debt which is held, as a whole, between individual consumers in the rest of the World’s economies. Especially in the Developing World, and more importantly Emerging Economies, which have seen a lack of growth, due to a decline in Foreign Direct Investment, Year to Date.
This cycle of Consumers spending more than they make, has existed for some time, especially in more industrialized economies like the United States, East Asia, and Europe. However, it has led to, along with the Feds belt tightening measures, after the March 2020 collapse in output, and inflation, a substantial increase in the volatility of the U.S. Mortgage Market, owing from an economy wide collapse in output, and thus a decrease in Housing Starts in general.
My main takeaways from our current economic impasse, is that the economy will follow the successful “flight path” recovery which has occurred in the United States Aviation Industry post COVID-19. This is assuming that the Fed keeps interest rates higher for longer, and so is in line with the UBS estimates of a later than average round of cuts which would occur closer to the end of this year, during the holiday season. Rather than in the middle of the year, as most economist have estimated.