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Markets are settling into holiday mode, with stock futures slightly down on the last full trading day before Christmas. Here’s where things stand today: * Nasdaq-100: +0.37% * S&P 500: +0.04% (flat) * Dow Jones: -0.22% On Friday, the S&P 500 rose 1.1%, recovering
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The S&P 500 Value Index just dropped 3.7%, marking its longest losing streak on record. Meanwhile, Bitcoin smashed past the $100,000 mark, and the Nasdaq climbed to 20,000. To me, it seems that value stocks have been left in the dust, and investors chasing bigger
Almost $10 billion has poured into Bitcoin ETFs since the US election, pushing Bitcoin past the $100,000 mark for the first time. The momentum is crazy, with Bitcoin posting its best winning streak since 2021. With investors pouring in, knowing the risks are more important than ever. Bitcoin’s
Core inflation is still climbing, and the Fed can't cut rates just yet. Find out why rising shelter costs are keeping inflation high.
So, inflation numbers dropped yesterday, and guess what? Your rent still isn’t getting any cheaper. While the headlines are celebrating, core inflation—aka the stuff that actually affects your daily life—isn’t cooling fast enough.
While headline inflation grabs attention, the Fed's bigger problem is core inflation, driven largely by housing costs.
What’s Really Driving Inflation? Well, core inflation increased by 0.3% in August 2024, following a 0.2% rise in July. Over the past year, core inflation has increased 3.2%, driven mainly by rising shelter costs. Shelter jumped 0.5% in August.
This chart shows how shelter costs have been a large driver of core inflation. Food prices were stable (0.1% increase in August), and energy prices fell (-0.8% month-over-month).
Despite a 2.5% year-over-year increase in headline inflation, the core inflation rate of 3.2% is preventing the Fed from cutting rates. Cutting rates too soon could reignite inflation, especially with shelter costs still climbing.
For consumers, borrowing costs, including mortgage rates, will remain high. With shelter costs rising 0.5% month-over-month and continuing to be the largest component of core CPI, rent and housing costs are unlikely to ease soon.
Homebuyers and renters could expect these elevated costs to persist. Meanwhile, energy prices are offering some relief, with gasoline prices down 0.6% and overall energy prices down 4.0% year-over-year, but the overall cost of living remains elevated due to shelter inflation.
The latest August 2024 CPI report shows that while headline inflation is improving, core inflation—driven primarily by shelter—remains a challenge. The Federal Reserve is unlikely to lower interest rates until shelter costs come down significantly. Consumers should prepare for continued high costs in housing and borrowing.