The Fed’s Inflation MISSION IMPOSSIBLE

12 straight months of declining inflation.

In fact, the 3% year-over-year inflation rate increase was actually below expectations.

Core inflation (everything except food and energy) was at 4.8% – down from 5.5% in May.

The markets surged yesterday morning… but didn’t end up gaining much ground.

Here’s why.

Remember the target for inflation is 2%. After 12 straight months, inflation is now at 3% year-over-year.

Unemployment is at 3.6% now… but that will probably need to increase for inflation to cool.

And as inflation cools, the economy will slow down.

The goal here is a “soft landing,” but there is political pressure, as the presidential election is about to get underway.

While surging gas prices are no longer a concern, inflation is well above what the Fed wants. But if it doesn’t come down any more, we may see another interest rate hike… which far too many stock market analysts seem to have ruled out.

My view is simply that the Fed set too ambitious a target. Hitting 2% inflation without sending the economy crashing is an incredibly difficult goal.

Doing it without increasing unemployment and becoming a political punching bag during a presidential election is almost impossible.

I think the Federal Reserve is doing about as well as can be reasonably expected…

But it’s given itself a MISSION IMPOSSIBLE.

And Federal Reserve Chairman Jerome Powell only has himself to blame.

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WORD ON THE STREET

Inflation Slows, Farmers Out Of Florida, Railway Traffic Plummets

Will Powell Pull It Off? – Inflation is down to its slowest pace since June 2021, with the consumer price index up only 3% year-over-year and just 0.2% compared to last month. The rate of increase was slower than analysts expected, suggesting that Jerome Powell’s war on inflation may actually be working. However, inflation is still well above the Federal Reserve’s target.

100,000 Floridians May Lose Insurance – Farmers Insurance is reducing its coverage in Florida, saying that it will “discontinue offering Farmers-branded auto, home, and umbrella policies in the state.” About 100,000 residents will be affected. However, insurance offered by the company via brands distinct from the “exclusive agency distribution channel” will still be offered. Florida’s top regulator vowed to hold the company to its commitments

High overall claim risk and fraudulent lawsuits have led to home insurance firms pulling out of the Sunshine State

Donors Souring On DeSantis – Ron DeSantis won a crushing re-election victory as governor of Florida, but his presidential campaign has stagnated. He trails former president Donald Trump despite support from the likes of Elon Musk and raising $20 million. Donors are reportedly panicking about the fate of the campaign, worrying that Trump has built up an insurmountable lead. Citadel CEO Ken Griffin, a megadonor who said before the race that he was prepared to support DeSantis, has stayed on the sidelines and is “continuing to assess the field,” according to a spokesperson.
Strike Rages On, Crippling West Canadian Ports – A strike at Canadian ports in western Canada is inflicting severe pressure on supply chains and endangering $605 million in daily trade. The Association of American Railroads says freight rail traffic has fallen by 46%. The head of the American Apparel and Footwear Association complained “the strike is affecting everyone” and has called for the Canadian government to recall Parliament “to get people back to work and goods moving again.”

HOT SPOTS: What’s Going on in Geopolitics

Bulgari Backs Down After Calling Taiwan A Country – Bulgari, the Italian luxury brand, has apologized after its website referred to Taiwan and China as two separate countries. “Our brand has immediately corrected the mistakenly marked store addresses and map indications on the overseas official website, which resulted from management negligence,” it said. Translation: someone is in big trouble for endangering access to the Chinese market.
Kremlin Warns Against NATO Guarantees For Ukraine – As you might expect, Russia is not happy about NATO’s recent support for Ukraine, especially reports the country will be admitted into NATO once the war is over. “We consider this to be badly mistaken and potentially very dangerous,” said Kremlin spokesman Dmitry Peskov. “By taking such a decision, these countries will make Europe much more dangerous for many many years to come. And of course they will do a disservice to us, something we will take into account.”
China Rips NATO “Eastward Expansion” – China said that it would “resolutely safeguard its sovereignty, security, and development interests, and it resolutely opposes NATO’s eastward expansion into the Asia Pacific.” China’s diplomatic mission to NATO took a distinctly anti-diplomatic tone towards the alliance, accusing it of “seeking expansion and hegemony.”

CUTTING EDGE: What‘s Happening In Tech

Musk Launches His Own AI Company – Tesla, Twitter, and SpaceX just aren’t enough. Elon Musk has debuted his own AI company, xAI. The goal, tweeted Musk, is nothing less than to “understand the true nature of the universe.
Roblox Heads To Meta Quest – The game young teens are obsessed with is coming to VR. (They’ll be no living with them now.) Roblox will soon be available on the Quest 2 and Quest Pro. Meta claims the game will “make VR more social than ever before.
Silk Road Lieutenant Gets 20 Years – Roger Thomas Clark, aka “Variety Jones,” has been sentenced to 20 years in prison for running the infamous dark-web marketplace known as Silk Road. Judge Sidney Stein sternly lectured him that he “misguidedly turned his belief that drugs should be legal into material assistance for a criminal enterprise.

The sentence was the maximum length that Clark faced

“Congress recently passed legislation ordering permits issued for the Mountain Valley Pipeline built in Virginia and West Virginia. However, as we all know in the American system, anything important comes under the purview of random judges, not elected representatives.”

Senator Joe Manchin, a Democrat in the very red state of West Virginia, voted with his party on a bitterly divisive issue. But he won a key concession – a major pipeline in his state and legislation that removed it from judicial review.

But the courts just stopped it anyway. Now we have a major constitutional fight, and Senator Manchin’s fate – and the Senate – is in the balance. Mr. X has more.

PIPELINE CRISIS MEANS POLITICAL DOOM

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The Fed’s Inflation MISSION IMPOSSIBLE

WORD ON THE STREET

Inflation Slows, Farmers Out Of Florida, Railway Traffic Plummets

HOT SPOTS: What’s Going on in Geopolitics

CUTTING EDGE: What‘s Happening In Tech

Roblox Heads To Meta Quest – The game young teens are obsessed with is coming to VR. (They’ll be no living with them now.) Roblox will soon be available on the Quest 2 and Quest Pro. Meta claims the game will “make VR more social than ever before.

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