Day: January 17, 2024

Let’s talk about the economy and Fed monetary policy. Stay awake, please. Hang in there with me. Unless Jay Powell’s Federal Reserve wants to completely politicize monetary policy and slash interest rates in order to juice the economy and re-elect Joe Biden, there is absolutely no reason right now for the central bank to take the foot off the brake and slam down the accelerator. No reason whatsoever!

Fed Governor Christopher Waller said yesterday that the Fed should not rush into rate cuts. He’s right. Why is he right? Well, prices are still rising, inflicting significant damage to middle- and lower-income affordability. Over the past three years, typical family wages are some 4% below the rise of inflation.

The inflation rate itself is still above the Fed’s 2% target. The unemployment rate is still less than 4%. Retail sales, at least through the Christmas holidays, held up nicely and the Biden administration is still running a roughly $2 trillion budget deficit, driven principally by a spending-to-GDP ratio that is nearly over 24% – compared to a 50-year average of 20% – as they pour $5 trillion some odd into the economy since coming into office.

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There is no recession at the moment, though this could change, but the Atlanta Fed’s GDPNow Q4 estimate is currently 2.4% – not a boom, but not a bust either. There are chinks in the economic armor, most particularly a long slump in manufacturing output and jobs, but if the demand side of the economy via retail sales is growing much faster than supply-side manufacturing, that’s a potential inflation risk.

The Fed should be leery of this unbalanced economy. Meanwhile, the topline CPI in December was 3.4% year-over-year. The core rate was 3.9%, services 5%, and services excluding energy 3.5%. Every one of them well above the Fed’s 2% target.

Over the past three Bidenflation years, groceries are up 20%. Energy is up 26%. And new and used cars up about 20%. Mortgage rates are up around 7%. You need $1.19 today in order to match the purchasing power of the dollar pre-pandemic. That’s a 19% loss in the value of your money.

The dollar price of gold is still over $2,000. Wall Street keeps jabbering about three, four, or even five Fed rate cuts, but Wall Street loves easy money. Main Street does not.

The Federal Reserve projections show three or more rate cuts this year, but no particularly good reason for that. A recent Fed survey shows that over 90% of the central bank’s economists are Democrats, but I’m going to make a different bet.

I’m going to suggest that Fed head Jay Powell is an honorable man, he will not seek a third term as chair no matter who wins the presidential election, and instead wants to establish his historical reputation as the guy who got inflation back to the central bank’s 2% target.

It’s not exactly Volcker, because Powell was asleep for the first inflationary year, but I’ll bet he wants to redeem himself. Caveat emptor, all you Wall Street doves.

This article is adapted from Larry Kudlow’s opening commentary on the January 17, 2024, edition of “Kudlow.”

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Siggi’s Dairy is offering a prize of $10,000 if you’re willing to give up your smartphone for one month.

The New York-based company, which is known for selling an Icelandic yogurt called skyr, announced the contest on Wednesday. 

“We’re introducing a NEW kind of ‘Dry January’ this year,” the company’s website read. “Instead of abstaining from alcohol for a month, we challenge you to ditch your smartphone!”

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“We believe in the power of living a simpler life with fewer distractions. One of the biggest distractions in our lives today is our phone,” Siggi’s added.

Ten participants will be selected based on the essays they submit to Siggi’s. To make sure the contest entrants don’t use their smartphones, Siggi’s will send participants a lockbox and a flip-phone with a one-month prepaid SIM card.

In the end, one lucky winner could walk away with $10,000 and 60 cups of Siggi’s yogurt. 

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Kristina Drociak, Siggi’s director of PR and digital strategy, told FOX Business that the contest was inspired by the idea of digital detoxing.

“At Siggi’s, we believe in simplicity and that less is what truly sets you free,” she said. “Our brand ethos is all about stripping away the unnecessary, and just like fewer ingredients in yogurt, we believe fewer digital distractions can make for a more satisfying life.”

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“We recognize the increasing screen time and phone usage in our society and the negative effects this can have, which inspired us to launch Siggi’s Digital Detox Program for this new year,” Drociak added. 

“The goal of the program is to show people the benefits of going digital-free in hopes that this can start new healthy habits in 2024 and beyond.”

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The sign-up period for the contest starts Wednesday and ends Jan. 31. Interested consumers can visit the Siggi’s website to submit an application.

For more Lifestyle articles, visit foxbusiness.com/lifestyle.

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