Let's talk about Trump's inflation numbers being doubted by the big names.... - Belle of the Ranch

Well, howdy there internet people. It's
Belle again.
So, today we're going to talk about
Trump's inflation numbers being doubted
by the big names.
The new inflation report was interesting
to say the least. The report came out
and showed CPI at 2.7%.
The market expectation was that it was
going to come in around 3.1%.
Immediately Trump supporters started
doing victory laps. Retail investors
generally accepted it at face value
because they wanted to. A lot of
liberals sent questions asking if Trump
was cooking the books and the big names
in finance started pressing X to doubt.
There is definitely a lot of skepticism
coming from big financial houses and
we'll get to that, but we need to touch
on some other things first. A 2.7%
reading would be amazing, but it's
different from the expectation by a
drastic amount. Remember, the market
runs on estimates and when those
estimates are off by a large amount, the
market should have a negative reaction
because the estimate being off by that
much means that they've missed something
major about the economy. But that didn't
happen. There wasn't a negative
reaction. Why?
Because retail investors are running on
emotions pushing price to earnings to
dangerously high levels and because
frankly a lot of the big houses don't
believe the report.
Is that because Trump cooked the books?
Not exactly.
Michael Hansen, who is a senior
economist at JP Morgan, explained that
the numbers coming in lower than
expected, quote,
suggests that the BLS may have held
fixed a number of prices it was not able
to collect in October, which likely
means a material downward bias in the
current numbers that will be reversed in
coming months as full price collection
resumes.
Clear as mud, right? We can't just say
things in English when it comes to
economics. Here's the translation.
Because of the government shutdown, BLS
had to estimate October numbers instead
of using hard numbers coming from the
normal survey data collection process.
They estimated wrong, but it'll show up
later.
Meanwhile, Diane Swank, who is the chief
economist at KPMG,
which is one of the biggest audit, tax,
and advisory firms, cast doubt on the
accuracy of Trump's numbers as well,
saying, quote, "Things that should be
going up are going down, and things that
should be going down are going up." So,
it's confusing, and it doesn't quite
square with prices that we've observed.
If that doesn't do it for you, John
Hill, who is the guy over US inflation
strategy over at Bar Clays, flat out
said, "The report doesn't pass the smell
test." Using those exact words, then
going on to say, quote, "Given the lack
of explanation about how the BLS made
these decisions, it's hard to take at
face value."
Now, to be clear, there's actually a
note from BLS saying they used
non-servey data in this report. It's not
hidden. But really, who reads the notes?
If you've ever done a deep dive into one
of these reports, just for funsies, take
a look at all of those empty data
squares.
So, the big names are telling you not to
believe this report. BLS is saying they
used non-servey data, made it up, and it
didn't match expectations.
I wouldn't make financial decisions
based on this report, but there's also
no evidence that this was an
intentionally tanked report. It could
really just be bad estimates.
Anyway, it's just a thought. Y'all have
a good day.