How Accurately is Inflation Being Reported?

Member since 2023 · 6 posts · 10 votes

An interesting read: https://www.biggerpockets.com/blog/federal-reserve-to-lower-rates-six-times-says-ing-economics?utm_source=Iterable&utm_medium=email&utm_campaign=Newsletter%20%7C%2012/07/23

I’ve seen a few headlines of this, where some economic analysis “experts” are predicting large interest rate cuts. As this article mentions ING Economics released a report about a week ago claiming the Fed will cut rates 6 times over 250bp over the course of 2024 – 2025. I personally don’t see Inflation coming down to the Fed’s target of 2% anytime soon despite what some reports may claim. Just from day-to-day life from gas and grocery prices these days compared to a couple of years ago, prices are significantly higher today. Reports claim the inflation rate today is around 3.1-3.2% but I definitely think the average consumer feels this to be much higher.

What do you you’ll think, is inflation at an accurate spot according to the reports and will we face heavy cuts potentially in 2024?

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Matthew CrivelliBusiness Member

Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes

Every mainstream prediction has been wrong in the last few years. First we had transitory inflation in 2021, then we were told growth will slow in 2022, then we had a 100% probability of a recession in 2023, now we are being told that we are going to see a soft landing and the fed is going to drop rates. lol it's like opposite day around here with these predictions.

A few things to note - the treasury yields are still inverted, government spending is still out of control, the consumer is being squeezed with debt payments, student loans, cost of living hikes, and inflation is above the target goal. Oh and not to mention we haven't seen a recession in 15 years.

I'm taking the experts opinion with a grain of salt and articles like this are laughable....

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Albert Hasson
Investor · Paradise Valley, AZ · Member since 2012 · 361 posts · 214 votes
2y
Quote from @Jeremiah Dunakin:

I don’t know a lot I’m a simpleton. Here is what thoughts are. We live in a society that does value work. From the top down there is encouragement not to work. Culture has dictated less work more money. This is a recipe for disaster. At my shop we just went through a union contract. The new hires wanted the whole world given to them and they loathe seniority. This also goes in the public sector. We have an administration that has encouraged people not to work. The labor shortage is very real. This causes not as much to be produced and what is being produced is more expensive because of labor cost.
A short while ago I bought gas for 1.60 and a family pack of chicken thighs were 4.00. So I could go to work and eat dinner for 5.60. Today it’s 3.00$ gallon and 8 dollars for thighs. Same trip 11.00$ yes it’s doubled. Ground beef was 1.75/ 2.00 lbs. now it’s 6.00+ a lot. A 2x4 is 3$ plus used to 1.66$. This is true inflation forget all the metrics. That is just accounting. Most Americans are paying twice what they used to pay for stuff. Rent is through the roof. The cost to borrow money to invest is insane. Look at the price of a new truck compared to 5 years ago. Co pays at the hospital is higher. My work insurance is about to go up 25%. A few years ago I could go to McDonald’s get a double cheeseburger and a medium chocolate shake3.50 now it’s 8$ and it takes twice as long to get it

Gas was only $1.60 for a short time in the MIDDLE OF A PANDEMIC. Gas is cheaper now that at many times pre pandemic. What you fail to mention is that wage growth has been tremendous the past few years. Yes, things are more expensive. A candy bar was 25 cents when I was a kid!
And yet record travel expected this holiday season, consumer spending robust, malls and restaurants packed. The poor will always struggle, that hasn’t and will not change. Yes its tough to buy a house but if you have a sub 3% mortgage and your house has appreciated 30% in last 3 years you’re feeling pretty good.
1 Reply
Jeremiah Dunakin
Member since 2022 · 186 posts · 192 votes
2y
Quote from @Albert Hasson:

Quote from @Jeremiah Dunakin:

I don’t know a lot I’m a simpleton. Here is what thoughts are. We live in a society that does value work. From the top down there is encouragement not to work. Culture has dictated less work more money. This is a recipe for disaster. At my shop we just went through a union contract. The new hires wanted the whole world given to them and they loathe seniority. This also goes in the public sector. We have an administration that has encouraged people not to work. The labor shortage is very real. This causes not as much to be produced and what is being produced is more expensive because of labor cost.
A short while ago I bought gas for 1.60 and a family pack of chicken thighs were 4.00. So I could go to work and eat dinner for 5.60. Today it’s 3.00$ gallon and 8 dollars for thighs. Same trip 11.00$ yes it’s doubled. Ground beef was 1.75/ 2.00 lbs. now it’s 6.00+ a lot. A 2x4 is 3$ plus used to 1.66$. This is true inflation forget all the metrics. That is just accounting. Most Americans are paying twice what they used to pay for stuff. Rent is through the roof. The cost to borrow money to invest is insane. Look at the price of a new truck compared to 5 years ago. Co pays at the hospital is higher. My work insurance is about to go up 25%. A few years ago I could go to McDonald’s get a double cheeseburger and a medium chocolate shake3.50 now it’s 8$ and it takes twice as long to get it

Gas was only $1.60 for a short time in the MIDDLE OF A PANDEMIC. Gas is cheaper now that at many times pre pandemic. What you fail to mention is that wage growth has been tremendous the past few years. Yes, things are more expensive. A candy bar was 25 cents when I was a kid!
And yet record travel expected this holiday season, consumer spending robust, malls and restaurants packed. The poor will always struggle, that hasn’t and will not change. Yes it’s atough to buy a house but if you have a sub 3% mortgage and your house has appreciated 30% in last 3 years you’re feeling pretty good.

Gas, food and lumber was every bit 1/2 of what it is now. Things doubled in a matter of a couple years. Not over time. Yes the poor will continue to struggle. They make poor decisions. Wages have not kept up with inflation. When I started my union negotiated job I made 4x what a McDonald’s worker made now I make 2x. Wages have gone up some but not for a lot of middle class jobs.according to Fox News or CNN take your pick. Americans are paying 709$ more per month for same goods and services than they were two years ago.By my very simple calculations. At 160 working hours a month that is 4.43/ hr lost. I don’t know anyone in my area or line of work that have gotten more than 4.44 an hour raise to keep up with that. Let alone outpace it. Yes some unions have gotten that. But the majority of Americans have not seen that wage growth. Most people get around 3% a year. 80000$ year job at 3% is about a 1.15$ / hr increase. Over two years that’s 2.30$/hr far below the 4.43$ we have lost to inflation. Again I’m a simpleton factory worker but what I see in working class has been a huge reduction in wealth.
As far as traveling. People are doing that. We also have a credit crisis in our nation.Maybe all these people aren’t paying on credit but I’ve a hard time believing they ain’t.
2 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @Jeremiah Dunakin:

Quote from @Albert Hasson:

Quote from @Jeremiah Dunakin:

I don’t know a lot I’m a simpleton. Here is what thoughts are. We live in a society that does value work. From the top down there is encouragement not to work. Culture has dictated less work more money. This is a recipe for disaster. At my shop we just went through a union contract. The new hires wanted the whole world given to them and they loathe seniority. This also goes in the public sector. We have an administration that has encouraged people not to work. The labor shortage is very real. This causes not as much to be produced and what is being produced is more expensive because of labor cost.
A short while ago I bought gas for 1.60 and a family pack of chicken thighs were 4.00. So I could go to work and eat dinner for 5.60. Today it’s 3.00$ gallon and 8 dollars for thighs. Same trip 11.00$ yes it’s doubled. Ground beef was 1.75/ 2.00 lbs. now it’s 6.00+ a lot. A 2x4 is 3$ plus used to 1.66$. This is true inflation forget all the metrics. That is just accounting. Most Americans are paying twice what they used to pay for stuff. Rent is through the roof. The cost to borrow money to invest is insane. Look at the price of a new truck compared to 5 years ago. Co pays at the hospital is higher. My work insurance is about to go up 25%. A few years ago I could go to McDonald’s get a double cheeseburger and a medium chocolate shake3.50 now it’s 8$ and it takes twice as long to get it

Gas was only $1.60 for a short time in the MIDDLE OF A PANDEMIC. Gas is cheaper now that at many times pre pandemic. What you fail to mention is that wage growth has been tremendous the past few years. Yes, things are more expensive. A candy bar was 25 cents when I was a kid!
And yet record travel expected this holiday season, consumer spending robust, malls and restaurants packed. The poor will always struggle, that hasn’t and will not change. Yes it’s atough to buy a house but if you have a sub 3% mortgage and your house has appreciated 30% in last 3 years you’re feeling pretty good.

Gas, food and lumber was every bit 1/2 of what it is now. Things doubled in a matter of a couple years. Not over time. Yes the poor will continue to struggle. They make poor decisions. Wages have not kept up with inflation. When I started my union negotiated job I made 4x what a McDonald’s worker made now I make 2x. Wages have gone up some but not for a lot of middle class jobs.according to Fox News or CNN take your pick. Americans are paying 709$ more per month for same goods and services than they were two years ago.By my very simple calculations. At 160 working hours a month that is 4.43/ hr lost. I don’t know anyone in my area or line of work that have gotten more than 4.44 an hour raise to keep up with that. Let alone outpace it. Yes some unions have gotten that. But the majority of Americans have not seen that wage growth. Most people get around 3% a year. 80000$ year job at 3% is about a 1.15$ / hr increase. Over two years that’s 2.30$/hr far below the 4.43$ we have lost to inflation. Again I’m a simpleton factory worker but what I see in working class has been a huge reduction in wealth.
As far as traveling. People are doing that. We also have a credit crisis in our nation.Maybe all these people aren’t paying on credit but I’ve a hard time believing they ain’t.

You guys understand the meaning of infation right ?
it just means 100 dollar 2 years ago has the same buying power of 95 dollar today. This is with standard 3% inflation. Your dollar is devalued every year by default (hence please invest).
so when your wage increase by 3 percent actually your wage increase by 0 percent in term of real price. lol.....
( but yea as long as we keep eating kungpao where that food price never rise, our salary againts cost of good is actually positive....this is why i also telling folks if you are househacking in primary and your dscr is above 1.0 ; you live in dis-inflation world too lol lol)
2 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
2y
Quote from @Albert Hasson:

And yet record travel expected this holiday season, consumer spending robust, malls and restaurants packed. The poor will always struggle, that hasn’t and will not change. Yes its tough to buy a house but if you have a sub 3% mortgage and your house has appreciated 30% in last 3 years you’re feeling pretty good.

My my...quite the apologist aren't we...? I wonder how you vote...naw I don't.

Since we're talking gas prices, here are the prices for the past 4 Presidents, just to throw some facts in here....
1. Joe Biden (partial term) — $3.60
2. Barack Obama first term — $3.12
3. Barack Obama second term — $2.95
4. George W. Bush second term — $2.77
5. Donald Trump — $2.57
6. George W. Bush first term — $1.59
@Account Closed was right at the beginning. The powers that be (on both sides) manipulate stats to suit their narrative....they used to count food and fuel, not any longer, wonder why....?
4 Reply
Jeremiah Dunakin
Member since 2022 · 186 posts · 192 votes
2y
Quote from @Carlos Ptriawan:

Quote from @Jeremiah Dunakin:

Quote from @Albert Hasson:

Quote from @Jeremiah Dunakin:

I don’t know a lot I’m a simpleton. Here is what thoughts are. We live in a society that does value work. From the top down there is encouragement not to work. Culture has dictated less work more money. This is a recipe for disaster. At my shop we just went through a union contract. The new hires wanted the whole world given to them and they loathe seniority. This also goes in the public sector. We have an administration that has encouraged people not to work. The labor shortage is very real. This causes not as much to be produced and what is being produced is more expensive because of labor cost.
A short while ago I bought gas for 1.60 and a family pack of chicken thighs were 4.00. So I could go to work and eat dinner for 5.60. Today it’s 3.00$ gallon and 8 dollars for thighs. Same trip 11.00$ yes it’s doubled. Ground beef was 1.75/ 2.00 lbs. now it’s 6.00+ a lot. A 2x4 is 3$ plus used to 1.66$. This is true inflation forget all the metrics. That is just accounting. Most Americans are paying twice what they used to pay for stuff. Rent is through the roof. The cost to borrow money to invest is insane. Look at the price of a new truck compared to 5 years ago. Co pays at the hospital is higher. My work insurance is about to go up 25%. A few years ago I could go to McDonald’s get a double cheeseburger and a medium chocolate shake3.50 now it’s 8$ and it takes twice as long to get it

Gas was only $1.60 for a short time in the MIDDLE OF A PANDEMIC. Gas is cheaper now that at many times pre pandemic. What you fail to mention is that wage growth has been tremendous the past few years. Yes, things are more expensive. A candy bar was 25 cents when I was a kid!
And yet record travel expected this holiday season, consumer spending robust, malls and restaurants packed. The poor will always struggle, that hasn’t and will not change. Yes it’s atough to buy a house but if you have a sub 3% mortgage and your house has appreciated 30% in last 3 years you’re feeling pretty good.

Gas, food and lumber was every bit 1/2 of what it is now. Things doubled in a matter of a couple years. Not over time. Yes the poor will continue to struggle. They make poor decisions. Wages have not kept up with inflation. When I started my union negotiated job I made 4x what a McDonald’s worker made now I make 2x. Wages have gone up some but not for a lot of middle class jobs.according to Fox News or CNN take your pick. Americans are paying 709$ more per month for same goods and services than they were two years ago.By my very simple calculations. At 160 working hours a month that is 4.43/ hr lost. I don’t know anyone in my area or line of work that have gotten more than 4.44 an hour raise to keep up with that. Let alone outpace it. Yes some unions have gotten that. But the majority of Americans have not seen that wage growth. Most people get around 3% a year. 80000$ year job at 3% is about a 1.15$ / hr increase. Over two years that’s 2.30$/hr far below the 4.43$ we have lost to inflation. Again I’m a simpleton factory worker but what I see in working class has been a huge reduction in wealth.
As far as traveling. People are doing that. We also have a credit crisis in our nation.Maybe all these people aren’t paying on credit but I’ve a hard time believing they ain’t.

You guys understand the meaning of infation right ?
it just means 100 dollar 2 years ago has the same buying power of 95 dollar today. This is with standard 3% inflation. Your dollar is devalued every year by default (hence please invest).
so when your wage increase by 3 percent actually your wage increase by 0 percent in term of real price. lol.....
( but yea as long as we keep eating kungpao where that food price never rise, our salary againts cost of good is actually positive....this is why i also telling folks if you are househacking in primary and your dscr is above 1.0 ; you live in dis-inflation world too lol lol)

It’s cool. Most people when they think of the word inflation they think about buying power for the most part. We can go by the technical definition. 95% of people will not go by that. People just know that they ain’t got no money now. They know that credit cards balances are all time high. They know that it cost double for everything. Call it devalue of the dollar, inflation, or dollar erosion. Call it what you will. The government has changed the terms and how inflation is measured. Call it what u will.
2 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @Bruce Woodruff:

I could add fuel to the fire but even without these two political powers, the fed method of calculating inflation itself is wrong, they only ask people via survey, that's the way they manage an 2023 economy with the same methodology of 1970s. And they work without an accountability of their action.
3 Reply
Alan F.
Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes
2y
Quote from @Bruce Woodruff:
Quote from @Albert Hasson:

And yet record travel expected this holiday season, consumer spending robust, malls and restaurants packed. The poor will always struggle, that hasn’t and will not change. Yes its tough to buy a house but if you have a sub 3% mortgage and your house has appreciated 30% in last 3 years you’re feeling pretty good.

My my...quite the apologist aren't we...? I wonder how you vote...naw I don't.

Since we're talking gas prices, here are the prices for the past 4 Presidents, just to throw some facts in here....

Joe Biden (partial term) — $3.60
Barack Obama first term — $3.12
Barack Obama second term — $2.95
George W. Bush second term — $2.77
Donald Trump — $2.57
George W. Bush first term — $1.59

@Account Closed was right at the beginning. The powers that be (on both sides) manipulate stats to suit their narrative....they used to count food and fuel, not any longer, wonder why....?
I was gonna tag Carlos but you beat me lol.
Yeah and you know gas prices back here :(
According to Statista and a couple other sites air travel is right on par with 2019
According to IESE & a couple others discretionary spending dropped from 12% in late 2021 to 2% by winter of 2022. They speculate itll return to 6% this winter but that info wont come out til 2024
1 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @Alan F.:
Quote from @Bruce Woodruff:

Quote from @Albert Hasson:

And yet record travel expected this holiday season, consumer spending robust, malls and restaurants packed. The poor will always struggle, that hasn’t and will not change. Yes its tough to buy a house but if you have a sub 3% mortgage and your house has appreciated 30% in last 3 years you’re feeling pretty good.

My my...quite the apologist aren't we...? I wonder how you vote...naw I don't.

Since we're talking gas prices, here are the prices for the past 4 Presidents, just to throw some facts in here....

Joe Biden (partial term) — $3.60
Barack Obama first term — $3.12
Barack Obama second term — $2.95
George W. Bush second term — $2.77
Donald Trump — $2.57
George W. Bush first term — $1.59

@Account Closed was right at the beginning. The powers that be (on both sides) manipulate stats to suit their narrative....they used to count food and fuel, not any longer, wonder why....?

I was gonna tag Carlos but you beat me lol.
Yeah and you know gas prices back here :(
According to Statista and a couple other sites air travel is right on par with 2019
According to IESE & a couple others discretionary spending dropped from 12% in late 2021 to 2% by winter of 2022. They speculate itll return to 6% this winter but that info wont come out til 2024
you need to tag @James Hamling , he is so hilarious with how SPR oil reserves declines and oil is still three-bucks-something lol. James is like more oil guy here than real estate guy ;-)
0 Reply
Alan F.
Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes
2y
Quote from @Carlos Ptriawan:
Quote from @Alan F.:

Quote from @Bruce Woodruff:

Quote from @Albert Hasson:

And yet record travel expected this holiday season, consumer spending robust, malls and restaurants packed. The poor will always struggle, that hasn’t and will not change. Yes its tough to buy a house but if you have a sub 3% mortgage and your house has appreciated 30% in last 3 years you’re feeling pretty good.

My my...quite the apologist aren't we...? I wonder how you vote...naw I don't.

Since we're talking gas prices, here are the prices for the past 4 Presidents, just to throw some facts in here....

Joe Biden (partial term) — $3.60
Barack Obama first term — $3.12
Barack Obama second term — $2.95
George W. Bush second term — $2.77
Donald Trump — $2.57
George W. Bush first term — $1.59

@Account Closed was right at the beginning. The powers that be (on both sides) manipulate stats to suit their narrative....they used to count food and fuel, not any longer, wonder why....?

I was gonna tag Carlos but you beat me lol.
Yeah and you know gas prices back here :(
According to Statista and a couple other sites air travel is right on par with 2019
According to IESE & a couple others discretionary spending dropped from 12% in late 2021 to 2% by winter of 2022. They speculate itll return to 6% this winter but that info wont come out til 2024

you need to tag @James Hamling , he is so hilarious with how SPR oil reserves declines and oil is still three-bucks-something lol. James is like more oil guy here than real estate guy ;-)
I can't tag from my phone :(
Glad you tagged em.....waiting :)
0 Reply
V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
Quote from @Albert Hasson:

Quote from @Jeremiah Dunakin:

I don’t know a lot I’m a simpleton. Here is what thoughts are. We live in a society that does value work. From the top down there is encouragement not to work. Culture has dictated less work more money. This is a recipe for disaster. At my shop we just went through a union contract. The new hires wanted the whole world given to them and they loathe seniority. This also goes in the public sector. We have an administration that has encouraged people not to work. The labor shortage is very real. This causes not as much to be produced and what is being produced is more expensive because of labor cost.
A short while ago I bought gas for 1.60 and a family pack of chicken thighs were 4.00. So I could go to work and eat dinner for 5.60. Today it’s 3.00$ gallon and 8 dollars for thighs. Same trip 11.00$ yes it’s doubled. Ground beef was 1.75/ 2.00 lbs. now it’s 6.00+ a lot. A 2x4 is 3$ plus used to 1.66$. This is true inflation forget all the metrics. That is just accounting. Most Americans are paying twice what they used to pay for stuff. Rent is through the roof. The cost to borrow money to invest is insane. Look at the price of a new truck compared to 5 years ago. Co pays at the hospital is higher. My work insurance is about to go up 25%. A few years ago I could go to McDonald’s get a double cheeseburger and a medium chocolate shake3.50 now it’s 8$ and it takes twice as long to get it

Gas was only $1.60 for a short time in the MIDDLE OF A PANDEMIC. Gas is cheaper now that at many times pre pandemic. What you fail to mention is that wage growth has been tremendous the past few years. Yes, things are more expensive. A candy bar was 25 cents when I was a kid!
And yet record travel expected this holiday season, consumer spending robust, malls and restaurants packed. The poor will always struggle, that hasn’t and will not change. Yes its tough to buy a house but if you have a sub 3% mortgage and your house has appreciated 30% in last 3 years you’re feeling pretty good.

Credit card debt is at the highest & savings is at the lowest-- something will give. Oil prices are literally telling you there's a downturn ahead. It's priced in with the OPEC saying their curtailing, yet the oil price didn't even budge.

The consumer economy is prioritizing the now and not the savings required to be sufficient later. That's all the spending is telling you, it's not telling you the economy is strong. How we interpret it is clearly different, it's literally propped up by leverage and the liquidity behind it is gone. The market is pricing in the economy having to bounce back after it, and literally front running it. Maybe a bit too aggressively and prematurely, some metrics are definitely overbought. Some sectors should be rotated here-- probably needs to go into more healthcare & oil.
2 Reply
Benjamin Sulka
Cleveland, OH · Member since 2022 · 811 posts · 578 votes
2y
Quote from @Carlos Ptriawan:

Quote from @Bruce Woodruff:

I could add fuel to the fire but even without these two political powers, the fed method of calculating inflation itself is wrong, they only ask people via survey, that's the way they manage an 2023 economy with the same methodology of 1970s. And they work without an accountability of their action.

100% and the basket of goods that they use to calculate the CPI changes all the time.
1 Reply
Benjamin Sulka
Cleveland, OH · Member since 2022 · 811 posts · 578 votes
2y
Quote from @Andrew Syrios:

They don't include housing (nor stocks and bonds) nor insurance in the CPI, which I think makes inflation look better than it is. I also think they conjole the numbers to a certain degree. I don't think inflation is wildly higher than what's reported, but it's definitely higher IMO

They can make the numbers look however they want. Trusting the government's inflation numbers is like trusting your kid to do his own report card.

If anybody remembers, when the White House showed price decreases year over year for Thanksgiving items, they didn't even include turkey.

2 Reply
David Dachtera
Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
2y
Quote from @Carlos Ptriawan:

Quote from @David Dachtera:

Purely my opinion ...
What we've been seeing is not inflation, it's corporate price gouging.
There was a report on Good Morning America today about breakfast cereal, for example. It was reported that even with decreasing sales, General Mills increased retail prices of it's cereal products. GM claimed that supply chain and other issues increased production costs. Yet, instead of decreasing production to match reduced sales they raised retail prices further reducing sales.
It appears that America's business schools are failing miserably.

.. totally and it's not just one company

... hence, the phrase "for example".
1 Reply
Chad McMahan
Residential Real Estate Broker · Sedona, AZ · Member since 2017 · 751 posts · 504 votes
2y
Quote from @Josh Sidhu:

An interesting read: https://www.biggerpockets.com/blog/federal-reserve-to-lower-rates-six-times-says-ing-economics?utm_source=Iterable&utm_medium=email&utm_campaign=Newsletter%20%7C%2012/07/23

I’ve seen a few headlines of this, where some economic analysis “experts” are predicting large interest rate cuts. As this article mentions ING Economics released a report about a week ago claiming the Fed will cut rates 6 times over 250bp over the course of 2024 – 2025. I personally don’t see Inflation coming down to the Fed’s target of 2% anytime soon despite what some reports may claim. Just from day-to-day life from gas and grocery prices these days compared to a couple of years ago, prices are significantly higher today. Reports claim the inflation rate today is around 3.1-3.2% but I definitely think the average consumer feels this to be much higher.

What do you you’ll think, is inflation at an accurate spot according to the reports and will we face heavy cuts potentially in 2024?
Hi Josh.
I appreciate you putting this out there. 2-3 months ago, or so, I posted something somewhat similar; I essentially posted that inflation is higher than people think. I even provided a government provided graph that showed paced inflation was closer to 6%, rather than 2-3% that the white house expects us to believe. It's amazing how some people so quickly pounced on me, defending our supposed low inflation rate.
Like you, I am cynical about the mainstream statements about our economy and inflation rates. The White House admin has everything to gain by convincing others our economy is strong.
The fed rate roller coaster is pretty idiotic. It's raised to fix the economy and lowered to keep us from crashing. Seems common sense to me, to keep interest rates closer to 5%, rather than swinging it from 3% - 8.5%. Then again, I'm not an economist and I don't pretend to be an expert on this complicated game.
Bottom line, I continue to invest in as well as find profitable deals for clients, through it all, which requires adapting to current market and interest rates as well as STR supply/demand with shifting strategies. So far, so great.
The political stuff is so stupid at this point, I try to just do my thing the best I can, and know the rules/laws so I can play the game.
1 Reply
Alan F.
Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes
2y
Quote from @Chad McMahan:

Quote from @Josh Sidhu:

An interesting read: https://www.biggerpockets.com/blog/federal-reserve-to-lower-rates-six-times-says-ing-economics?utm_source=Iterable&utm_medium=email&utm_campaign=Newsletter%20%7C%2012/07/23

I’ve seen a few headlines of this, where some economic analysis “experts” are predicting large interest rate cuts. As this article mentions ING Economics released a report about a week ago claiming the Fed will cut rates 6 times over 250bp over the course of 2024 – 2025. I personally don’t see Inflation coming down to the Fed’s target of 2% anytime soon despite what some reports may claim. Just from day-to-day life from gas and grocery prices these days compared to a couple of years ago, prices are significantly higher today. Reports claim the inflation rate today is around 3.1-3.2% but I definitely think the average consumer feels this to be much higher.

What do you you’ll think, is inflation at an accurate spot according to the reports and will we face heavy cuts potentially in 2024?
Hi Josh.
I appreciate you putting this out there. 2-3 months ago, or so, I posted something somewhat similar; I essentially posted that inflation is higher than people think. I even provided a government provided graph that showed paced inflation was closer to 6%, rather than 2-3% that the white house expects us to believe. It's amazing how some people so quickly pounced on me, defending our supposed low inflation rate.
Like you, I am cynical about the mainstream statements about our economy and inflation rates. The White House admin has everything to gain by convincing others our economy is strong.
The fed rate roller coaster is pretty idiotic. It's raised to fix the economy and lowered to keep us from crashing. Seems common sense to me, to keep interest rates closer to 5%, rather than swinging it from 3% - 8.5%. Then again, I'm not an economist and I don't pretend to be an expert on this complicated game.
Bottom line, I continue to invest in as well as find profitable deals for clients, through it all, which requires adapting to current market and interest rates as well as STR supply/demand with shifting strategies. So far, so great.
The political stuff is so stupid at this point, I try to just do my thing the best I can, and know the rules/laws so I can play the game.
Great post, great points. Theres inflation calculators easily available on line if folks want to know true inflation. I also agree about carrying on, that's what we always do. Posters that get upset about sharing information don't understand that 5min on the forum aren't deterring us from moving forward. Nobody in this thread said the sky is falling lol. Very best to you
2 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @Chad McMahan:

Quote from @Josh Sidhu:

An interesting read: https://www.biggerpockets.com/blog/federal-reserve-to-lower-rates-six-times-says-ing-economics?utm_source=Iterable&utm_medium=email&utm_campaign=Newsletter%20%7C%2012/07/23

I’ve seen a few headlines of this, where some economic analysis “experts” are predicting large interest rate cuts. As this article mentions ING Economics released a report about a week ago claiming the Fed will cut rates 6 times over 250bp over the course of 2024 – 2025. I personally don’t see Inflation coming down to the Fed’s target of 2% anytime soon despite what some reports may claim. Just from day-to-day life from gas and grocery prices these days compared to a couple of years ago, prices are significantly higher today. Reports claim the inflation rate today is around 3.1-3.2% but I definitely think the average consumer feels this to be much higher.

What do you you’ll think, is inflation at an accurate spot according to the reports and will we face heavy cuts potentially in 2024?
Hi Josh.
I appreciate you putting this out there. 2-3 months ago, or so, I posted something somewhat similar; I essentially posted that inflation is higher than people think. I even provided a government provided graph that showed paced inflation was closer to 6%, rather than 2-3% that the white house expects us to believe. It's amazing how some people so quickly pounced on me, defending our supposed low inflation rate.
Like you, I am cynical about the mainstream statements about our economy and inflation rates. The White House admin has everything to gain by convincing others our economy is strong.
The fed rate roller coaster is pretty idiotic. It's raised to fix the economy and lowered to keep us from crashing. Seems common sense to me, to keep interest rates closer to 5%, rather than swinging it from 3% - 8.5%. Then again, I'm not an economist and I don't pretend to be an expert on this complicated game.
Bottom line, I continue to invest in as well as find profitable deals for clients, through it all, which requires adapting to current market and interest rates as well as STR supply/demand with shifting strategies. So far, so great.
The political stuff is so stupid at this point, I try to just do my thing the best I can, and know the rules/laws so I can play the game.

200% I have same opinion.
1 Reply

Carlos Ptriawan

Member since 2019 · 7k+ posts · 4k+ votes

Quote from @Alan F.:

Quote from @Chad McMahan:

Quote from @Josh Sidhu:

An interesting read: https://www.biggerpockets.com/blog/federal-reserve-to-lower-rates-six-times-says-ing-economics?utm_source=Iterable&utm_medium=email&utm_campaign=Newsletter%20%7C%2012/07/23

What do you you’ll think, is inflation at an accurate spot according to the reports and will we face heavy cuts potentially in 2024?

Hi Josh.
I appreciate you putting this out there. 2-3 months ago, or so, I posted something somewhat similar; I essentially posted that inflation is higher than people think. I even provided a government provided graph that showed paced inflation was closer to 6%, rather than 2-3% that the white house expects us to believe. It's amazing how some people so quickly pounced on me, defending our supposed low inflation rate.

Like you, I am cynical about the mainstream statements about our economy and inflation rates. The White House admin has everything to gain by convincing others our economy is strong.

The fed rate roller coaster is pretty idiotic. It's raised to fix the economy and lowered to keep us from crashing. Seems common sense to me, to keep interest rates closer to 5%, rather than swinging it from 3% - 8.5%. Then again, I'm not an economist and I don't pretend to be an expert on this complicated game.

Bottom line, I continue to invest in as well as find profitable deals for clients, through it all, which requires adapting to current market and interest rates as well as STR supply/demand with shifting strategies. So far, so great.

The political stuff is so stupid at this point, I try to just do my thing the best I can, and know the rules/laws so I can play the game.

Great post, great points. Theres inflation calculators easily available on line if folks want to know true inflation. I also agree about carrying on, that's what we always do. Posters that get upset about sharing information don't understand that 5min on the forum aren't deterring us from moving forward. Nobody in this thread said the sky is falling lol. Very best to you

in reality , the actual inflation should be at very minimum similar to I-bond rate, which is around 5%.

Here's how we got that rate
via https://treasurydirect.gov/savings-bonds/i-bonds/i-bonds-interest-rates/#:~:text=The%20composite%20rate%20for%20I,through%20April%202024%20is%205.27%25.

Fixed rate	1.30%
Semiannual (1/2 year) inflation rate	1.97%
Composite rate formula: [Fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)]	[0.0130 + (2 x 0.0197) + (0.0130 x 0.0197)]
Gives a composite rate of	[0.0130 + 0.0394 + 0.0002561]
Adding the parts gives	0.0526561
Rounding gives	0.0527
Turning the decimal number to a percentage gives a composite rate of	5.27%

0 Reply

Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @David Dachtera:

Quote from @Carlos Ptriawan:

Quote from @David Dachtera:

Purely my opinion ...
What we've been seeing is not inflation, it's corporate price gouging.
There was a report on Good Morning America today about breakfast cereal, for example. It was reported that even with decreasing sales, General Mills increased retail prices of it's cereal products. GM claimed that supply chain and other issues increased production costs. Yet, instead of decreasing production to match reduced sales they raised retail prices further reducing sales.
It appears that America's business schools are failing miserably.

.. totally and it's not just one company

... hence, the phrase "for example".

If we see from cost of good perspective, inflation is actually 80% LOL
1 Reply
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
2y
Quote from @Carlos Ptriawan:
Quote from @Alan F.:

Quote from @Bruce Woodruff:

Quote from @Albert Hasson:

And yet record travel expected this holiday season, consumer spending robust, malls and restaurants packed. The poor will always struggle, that hasn’t and will not change. Yes its tough to buy a house but if you have a sub 3% mortgage and your house has appreciated 30% in last 3 years you’re feeling pretty good.

My my...quite the apologist aren't we...? I wonder how you vote...naw I don't.

Since we're talking gas prices, here are the prices for the past 4 Presidents, just to throw some facts in here....

Joe Biden (partial term) — $3.60
Barack Obama first term — $3.12
Barack Obama second term — $2.95
George W. Bush second term — $2.77
Donald Trump — $2.57
George W. Bush first term — $1.59

@Account Closed was right at the beginning. The powers that be (on both sides) manipulate stats to suit their narrative....they used to count food and fuel, not any longer, wonder why....?

I was gonna tag Carlos but you beat me lol.
Yeah and you know gas prices back here :(
According to Statista and a couple other sites air travel is right on par with 2019
According to IESE & a couple others discretionary spending dropped from 12% in late 2021 to 2% by winter of 2022. They speculate itll return to 6% this winter but that info wont come out til 2024

you need to tag @James Hamling , he is so hilarious with how SPR oil reserves declines and oil is still three-bucks-something lol. James is like more oil guy here than real estate guy ;-)
Look, let's just cut straight to the point and reality of it.
We could hold a lottery of 3rd grade classrooms, to present there best proposal, and the winner get's to run the U.S. for a year, and we'd all enjoy the VAST improvement of things.
Ok, maybe 3rd grade classroom is a bit much, ok, 2nd grade classrooms, that's maybe more on par, we don't wanna show-boat to much to make the pro politicians look too dumb.
2 Reply
Guy Gimenez
Investor · Corpus Christi, TX · Member since 2012 · 2k+ posts · 1k+ votes
2y
Believe any the government states at your own peril. Every aspect of the economy is manipulated and by redefining how any statistic is calculated, you can make the data show anything you want...and they most certainly do just that.
3 Reply
Alan F.
Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes
2y
Quote from @Guy Gimenez:

Believe any the government states at your own peril. Every aspect of the economy is manipulated and by redefining how any statistic is calculated, you can make the data show anything you want...and they most certainly do just that.

There are lies, damn lies and there are statistics- Mark Twain
2 Reply
Mona Lisa Harrison
Real Estate Consultant · Greenville, SC · Member since 2015 · 45 posts · 35 votes
2y
For a better understanding of WHY we are talking about inflation, the FED, interest rates, etc, read The Creature From Jekyll Island by G. Edward Griffin. It's a thick book but an easy read. Goes down a lot of interesting rabbit holes, however, they all connect.
And you will better understand how the world and money work. And you will likely get very upset.
1 Reply
Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
2y
hmm... it seems to me EVERYONE cherrypicks information to make things look better. the federal government. WeWork. Enron. partners and spouses. =)
how are people's investment strategies being informed?

1 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @Nicholas L.:

hmm... it seems to me EVERYONE cherrypicks information to make things look better. the federal government. WeWork. Enron. partners and spouses. =)
how are people's investment strategies being informed?

True lol depends on what’s impacting us personally
1 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @Nicholas L.:

hmm... it seems to me EVERYONE cherrypicks information to make things look better. the federal government. WeWork. Enron. partners and spouses. =)
how are people's investment strategies being informed?

it only means:
1. if you are hoarding cash you lose money
2. hence money has to be invested
3. back to rule number 1 LOL

result:
renter networth by average 10k
homeowners network by average 430k
crazy statistic.
1 Reply

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