The Federal Reserve Held Overnight Rates in a Range of 5.25% to 5.50%… The Federal Open Market Committee (FOMC) held rates steady and gave no strong hints as to when rates would drop.
What it means— Who knew? Fed Chair Powell told us that inflation was falling but isn’t low enough to give the FOMC enough confidence to lower rates. For that to happen, inflation needs to be closer to the Fed’s 2% target. Since we’re around 3%, does that mean we won’t get a rate cut in 2024? And what about unemployment? If unemployment remains near 4%, will the Fed worry about reigniting inflation if it lowers rates? It sure seems like the Fed would welcome an economic smack in the face, complete with rising unemployment and falling economic growth, to make sure it’s not cutting rates just to raise them again within six months.
The issue is that the Fed can’t use monetary policy to fight inflation created through fiscal policy. The recipients of largesse to build new factories in the U.S. don’t care about interest rates much, as long as the free cash is flowing. It’s going to be hard to ease inflation while the Treasury is handing out cash.
Consumer Price Index Flat in May, Up 3.3%Over Last Year… Core inflation, excluding food and energy, rose 0.2% last month and from 3.4% to 3.6% over the last year.
What it means— The numbers came out on the same day the Fed announced the latest monetary decision, but it didn’t matter. Everyone knows gas has gotten a little cheaper since last month, but overall, we’re still getting crushed by rising prices on almost everything. It’s amazing to hear that, after four years, inflation is “down” to 3.3%, as if that’s a great accomplishment. It will be awesome when prices trend lower. Unfortunately, that only happens when we’re in a recession and unemployment is jumping higher. How about taking the credit card away from Congress so they stop spending money we don’t have? That would be a step in the right direction
The U.S. Federal Deficit is $1.2 Trillion, and We Still Have Four Months to Go in This Fiscal Year… The interest cost on our debt now exceeds our defense spending.
What it means— Much of our spending, like Social Security and Medicare, is locked in. We fight about the relatively small amount that isn’t. That’s backward. We should be starting at extreme measures on each side (everyone gets guaranteed income, or anyone with more than $10,000 in annual income does not get Social Security), and then see if we can find tolerable common ground. The wrench is that programs must be sustainable. To quote Maggie from the Northern Exposure sitcom, “…only in your dreams…”
Tallest Uninterrupted Waterfall in China Found To Have Pipes To Assist During Dry Season… The Yuntai Waterfall is located in central Henan Province and drops 1,023 feet. Or, it does when it has water. Apparently, there are times when it goes dry, so the park authorities diverted water from nearby sources to make sure that visitors aren’t disappointed, but they didn’t tell visitors. No one knew until an eagle-eyed visitor spotted the pipes near the top, which apparently pump water from nearby springs to the top. Whether it’s spring water or mountain runoff, it’s still beautiful.
Data supplied by HS Dent Research
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