08-10-2022, 01:35 PM
Honestly I do not know how the inflation number will go...so I will keep an open mind.
When recession starts to hit deeply(we are already seeing revised forecast by companies even though their last update was as recent as two weeks ago), inflation will go down pretty fast BUT when the recession is over, very likely inflation will shoot back up again.
US August CPI was down because gas and oil price dropped a lot and it pulled down the index while rentals and medical was up.... Now we have gas price going up again and also oil price ( oil price was up 5% yesterday even as s&p was down 2.8%). President Biden knows what is going to happen if it continues to trend up. If CPI for October goes up ( to be released in November), it would be very bad for their campaign. That's why you see Biden ' threatening' OPEC(Saudi Arabia)....and crazily drawing down their oil reserves to dampen oil price.
One thing to take note is small brother ( Saudi Arabia) shows that they are no longer going to listen to big brother(US).... That will have effect not only on oil price..
The Saudis have lots of bonds (sell bond, bond yield goes up and stock market falls) and US stocks and assets....this might not be good for stocks if they decide to 'de-risk' like Russia....
When recession starts to hit deeply(we are already seeing revised forecast by companies even though their last update was as recent as two weeks ago), inflation will go down pretty fast BUT when the recession is over, very likely inflation will shoot back up again.
US August CPI was down because gas and oil price dropped a lot and it pulled down the index while rentals and medical was up.... Now we have gas price going up again and also oil price ( oil price was up 5% yesterday even as s&p was down 2.8%). President Biden knows what is going to happen if it continues to trend up. If CPI for October goes up ( to be released in November), it would be very bad for their campaign. That's why you see Biden ' threatening' OPEC(Saudi Arabia)....and crazily drawing down their oil reserves to dampen oil price.
One thing to take note is small brother ( Saudi Arabia) shows that they are no longer going to listen to big brother(US).... That will have effect not only on oil price..
The Saudis have lots of bonds (sell bond, bond yield goes up and stock market falls) and US stocks and assets....this might not be good for stocks if they decide to 'de-risk' like Russia....
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