Inflation
Top Federal Reserve officials said on Wednesday the U.S. central bank is “closer” to cutting interest rates given inflation’s improved trajectory and a labor market in better balance, remarks that set the stage for a first reduction in borrowing costs in September.
Federal Reserve Chair Jerome Powell’s testimony before the Senate Banking Committee provided several key insights into the current economic landscape and potential future monetary policy actions.
Headwinds in interest rates, inflation and commodity prices seem to have little impact on land values, though single-digit decreases in Indiana, Kentucky, Michigan and Ohio have been reported.
The Federal Reserve has four more chances this calendar year to cut interest rates. Since July 2023, the system has kept its benchmark interest rate steady at a 23-year high of 5.25% to 5.5%.
The Federal Reserve voted to keep the benchmark interest rate steady despite a sticky inflation proving to be a challenge. Where could interest rates go? A conversation with Austan Goolsbee, president of the Chicago Fed.
The May Ag Economists’ Monthly Monitor found even with improved commodity prices over the past month, ag economists’ views on the net farm income picture slightly eroded, falling to $110.4 billion in May.
The latest Ag Economists’ Monthly Monitor projects a major drop in net farm income this year. Economists are also growing more pessimistic about the potential for interest rate cuts in 2024.
Despite the markets pricing in lower interest rates, Arlan Suderman expects inflation to rear its ugly head sometime in 2024.
To wrap up 2023 I thought I’d show my list of good news that few believe: the good news with declining crime rates, wage growth and cooling inflation.
From the election to world trade, as well as geopolitical factors that have the potential to shape agriculture in 2024, the December Ag Economists’ Monthly Monitor shows the possibility of several economic surprises.
Analysts say an initial cut could be made as early as first quarter 2024. One of the key factors the central banking system will consider is whether its inflation rate target of 2% has been achieved.
Farmers are opting to tap into their savings from recent prosperous years instead of taking out loans at the highest interest rates since 2007, according to surveys conducted by regional Federal Reserve banks.
While ag economists continue to be at odds when it comes to the likelihood of a recession in the U.S., some doubt the country’s biggest importers will be able to avoid a recession over the next 18 months.
John Phipps says nobody is forcing Americans to pay for the corporate windfall, but as consumers continue to spend, manufacturers to retailers have no reason to lower prices and profits.
Mortgage interest rates just hit a twenty-year high, topping 7%. High borrowing costs will slowly dampen farmer demand for acres as record land prices mean all but a few will have to borrow some to buy.
For 2024, USDA projects that food price inflation will be lower than that seen in 2023 and significantly lower than the rise seen in 2022.
See how rising costs impact you and your family.
Meanwhile, service prices and the core index (which excludes food and energy) remain high, with the core CPI descending to 4.8%.
The CPI for May shows egg prices experienced the largest monthly drop in 72 years, but the price consumers are paying for a dozen eggs is still well above average over the past 10 years.
John Phipps: The Link Between Rising Interest Rates and Inflation Isn’t as Simple as You Might Think
The causal link between the Federal Reserve discount rate and inflation is obvious to all serious armchair economists, but calls for an impending recession in the U.S. are missing a few details. John Phipps explains.
The Federal Reserve raised interest rates by a quarter of a percentage point and signaled it may pause further increases. In an overt shift, the central bank no longer says it “anticipates” further rates will be needed.
A study released by Farm Bureau finds 86% of Americans are concerned about food insecurity, but their trust in farmers remains high at 89%.
Between the 2022 CHIPS Act and the 2022 Inflation Reduction Act, there’s a policy push to bring the production of both semiconductor chips and nitrogen to the U.S.
John Phipps says eggs are a perfect example of an inelastic product – one barely sensitive to price. And as egg inventory ramps back up, it may be an indicator of what it could mean for egg prices in the months ahead.
Farm Action is asking the FTC to explore why the nation’s largest egg company is seeing record-high profits while consumers pay record-high prices. Ag economists say the jump in egg prices is simply supply and demand.
The Labor Department showed annual inflation cooled in December, with food prices up 0.3%. And while some food costs are showing improvement, the cost of eggs has spiked since last year.
Inflation and interest didn’t stop Iowa farmland values from reaching their all-time high in 2022. However, the higher interest rates don’t typically affect the land market values for one to two years.
Experts say the Fed is looking for signs of weakness in the economy before deciding interest rates have been raised sufficiently to curb inflation. Some signs are available now, says Vince Malanga, LaSalle Economics.
The end of the year is closing in. Have you considered new prepaid expense moves? According to Paul Neiffer, farm CPA at CLA Connect, you should.
Global inflation will likely decrease to 6.5% in 2023 and to 4.1% by 2024, according to the International Monetary Fund (IMF) forecast.