It is a daily ritual for millions of Australians, but if you have noticed the price of your morning flat white or soy latte increase, brace yourself — it is likely to get worse.
By the end of the year,...
It is a daily ritual for millions of Australians, but if you have noticed the price of your morning flat white or soy latte increase, brace yourself — it is likely to get worse.
By the end of the year,...
The rate for Series I savings bonds, also known as I bonds, could drop below 5% in May, experts predict. This would be less than the current 5.27% rate for bonds purchased before May 1st but still higher than the 4.3% offered for bonds bought between May 1st and October 31st. Despite the expected decline, experts still consider I bonds a good investment, especially for long-term savers.
While overall prices have increased (inflation), there are pockets of deflation (price decreases) in various industries. These include household goods (furniture, appliances), some groceries (apples), travel expenses, and durable goods (vehicles). Deflation is primarily due to supply chains improving, demand decreasing, and the strong US dollar making imports cheaper. However, quality improvements over time (e.g., in electronics) can also appear as price declines in government data.
Higher inflation than expected in March confirms earlier concerns about its persistence. The markets have lowered expectations for Federal Reserve rate cuts to two this year (instead of three), with the first now expected in September rather than June. The report showed all-items and core inflation above the Fed's 2% target, with services prices rising significantly. This lackluster news contributed to a sell-off in the markets. There remains a possibility that no rate cuts occur this year due to the rising inflation.
Inflation rose to 3.5% in March, driven by higher housing, gasoline, and other costs. However, some areas, like groceries, have seen improvement. While overall inflation is still elevated, wage growth has outpaced inflation, boosting household buying power. Experts believe inflation may be taking longer to subside than expected, but progress is being made and a return to normal levels is anticipated.
Inflation increased faster than expected in March, fueled by rising shelter and energy costs. The consumer price index rose 3.5%, higher than economists' predictions. Traders have now pushed back the expected date for the first interest rate cut by the Federal Reserve from June to September. This inflation spike is unlikely to prompt the Fed to cut rates anytime soon, as it reinforces the notion that inflation is stickier than previously anticipated.
The stock market remained steady ahead of key economic events this week. Inflation data on Wednesday is expected to show a decrease, while the earnings season begins Friday. Market performance will be influenced by these events, as well as interest rate decisions by the Federal Reserve. Tesla shares surged due to an announcement about a self-driving taxi, while cryptocurrency-related stocks performed well due to rising Bitcoin prices. Investors await insights into inflation and company earnings to guide future market movements.
A government report will be released on Wednesday showing that inflation is still high. The expected increases in price may signal that the Federal Reserve will not be able to lower interest rates as soon as hoped. This would affect consumers, investors, and the economy as a whole. Despite some progress made in reducing inflation, it has been slower than expected, and concerns remain about rising housing and energy costs.
Expect a busy week on Wall Street!
Inflation data on Wednesday will provide insights into the Fed's potential interest rate decisions. Earnings season kicks off with companies like Delta Air Lines and banks reporting their financial performance. Bank of America predicts strong earnings growth due to cost reductions and a favorable economic environment. The shift from goods spending to services supports earnings for businesses. Overall, the market's trajectory is more tied to earnings strength than potential Fed rate cuts.
Interest rates for credit cards, savings accounts, and mortgages remain elevated despite the Federal Reserve holding off on rate cuts. Credit card rates could stay high for the rest of 2024, while savings accounts continue to offer competitive interest rates but may moderate slightly over time. Mortgage rates, on the other hand, could decline to around 6% by year-end, potentially easing the tight housing market.
Despite ongoing inflation, certain categories are experiencing price drops. Egg prices have plummeted by 17%, while health insurance, laundry equipment, and car rentals have also seen significant declines. While the Federal Reserve aims for 2% inflation, core inflation remains elevated at 3.8%, indicating that it will take time to bring prices under control. Despite the challenges, real wages have risen since 2019, and global inflation is expected to moderate in the future.
Taylor Swift's Eras Tour had a positive economic impact in the U.S., boosting retail sales and GDP slightly. The tour's effect was significant in cities where it performed, driving up lodging prices, occupancy rates, and hotel revenues. While the tour's macro impact on national-level data was minimal, local economic benefits were substantial. However, the tour's impact may be more significant in smaller economies like Sweden and Singapore.
Headline inflation is forecast to show a 0.4% monthly increase and 3.1% year-over-year gain, with core inflation predicted at 0.3% monthly and 3.7% annually. This resilience may prevent Fed rate cuts at the next meeting. Rising gasoline prices have contributed to inflation, reinforcing the Fed's cautious approach to interest rate reductions.
