Episode 5526: Inflation Drops As Mainstream Tries To Spin

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Bannon`s War Room 55 min 6 speakers 5 chapters transcribed 2 months ago

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How did this morning's CPI report change Fed expectations and what did Kevin Warsh say?

Kevin Warsh 0:00

Viewed the data that came out this morning on CPI and it was it was positive relative to expectations. I'm not for cherry picking. I'm not going to show up here and say mission accomplished. And what I'd say is there's plenty of work to do.

Adam Wren 0:18

All right, that was Federal Reserve Chairman Kevin Warsh testifying yesterday before the House Financial Services Committee. His comments coming after the release of a better-than-expected inflation report. Let's bring in former Treasury official and Morning Joe economic analyst Steve Ratner, who has charts on yesterday's inflation data and oil prices. And there's a lot to cover.

Joe Scarborough 0:40

Yeah, Steve, really quickly before you get into all of this, Kevin Warsh was a deficit hawk in previous years. incarnations. And then when President Trump wanted him to come on board, he started sounding more like a dove. But is there reason to believe right now that sort of that hawk that he's always been, a man who understands that the last thing you want is inflation, kind of getting out of the barn door? Is that who he is again?

Unknown 1:12

Yeah, I think so, Joe. I think he was very clear in his testimony. And I've been talking to some other Fed officials who say the same thing, which is that basically the Fed remains completely committed to getting back to 2% inflation, which is not nearly where we are at the moment. And that is going to mean higher interest rates, probably not at their meeting in July, but later this year. That's what the market is now expecting. It's flipped from before the war. We thought interest rates were going to keep coming down. Now we think they're going to go up a bit in the course of this year. And the Fed remains committed to 2 percent. So, yes, I agree with you.

Adam Wren 1:47

All right. Let's go to your charts. The first one looking at inflation and how it's impacting workers, Steve.

Unknown 1:54

Right. So here's the point. We did get a somewhat better than expected inflation reading, as the chairman said yesterday. But to Joe's point, inflation is still running three and a half percent above where it was last year, obviously largely because of oil prices and the war. But nonetheless, that's where it is. The other piece of good news in the number was that wages are also up 3.5%. So essentially, for the first time since the war started, consumers are not losing more ground, but they do remain underwater, so to speak, relative to where they were before the war in terms of purchasing power. Now, obviously not all consumers are the same. We have obviously people at higher and lower incomes. And so the effect of this is different.

Unknown 2:38

And so here's a little data point to show you how it works kind of in the real world. This is a study by the New York Fed on gasoline purchases. And what it shows is that for higher, lower and middle income people, Gasoline purchases have been fairly tight and constant until you had the Iran war started. And then there's been a divergence here where high income Americans have maintained their roughly their level of gas purchases have essentially absorbed the higher prices, whereas middle and lower income families have had to cut back on their gas purchases. They've had to carpool more, take public transit or otherwise simply just not use their car quite as much. So an average, but but definitely different impacts.

Unknown 3:22

This is the primal scream of a dying regime. Pray for our enemies, because we're going medieval on these people. I got a free shot. All these networks lying about the people, the people had a belly full of it. I know you don't like hearing that. I know you try to do everything in the world to stop that, but you're not going to stop it. It's going to happen. And where do people like that go to share the big line? Mega media. I wish in my soul, I wish that any of these people had a conscience. Ask yourself, what is my task and what is my purpose? If that answer is to save my country, this country will be saved. War Room. Here's your host, Stephen K. Bann.

Stephen K. Bannon 4:13

It's Saturday, 18 July, Year of Our Lord, 2026. Welcome to the Saturday edition of The Worm.