U.S. Markets closed

U.S. inflation probably lower than reported, Fed study says

An employee checks U.S. dollar bank-notes at a bank in Hanoi, Vietnam August 12, 2015. REUTERS/Kham

SAN FRANCISCO (Reuters) - U.S. inflation in the first half of the year was probably "markedly lower" than reported, but policymakers are unlikely to set interest rates incorrectly as a result, according to an analysis published Monday by the San Francisco Federal Reserve Bank.

Researchers at the regional Fed bank had earlier found that the very weak readings for economic growth in the early part of the year were likely due to inadequate adjustments for seasonal fluctuations, and that true economic growth was probably much faster than reported.

The same researchers applied similar methodology to inflation data and found that core PCE inflation, the Fed's preferred gauge, was probably overstated by 0.3 and 0.2 percentage points in the first two quarters of the year, respectively.

The analysis could cast doubt on whether Fed policymakers can be confident that inflation is headed back to their 2-percent goal, the hurdle they have set for raising interest rates as soon as next month.

But the economists, led by San Francisco Fed chief researcher Glenn Rudebusch, found that because the policymakers take into account both of their goals of full employment and stable prices when setting policy, the overstatement of inflation in the reported data is unlikely to spur them into raising rates too soon.

"We estimate that inflation was lower and economic growth was faster during the first half of this year than currently reported in the published data," the researchers wrote. "However, policymakers realize that any single piece of data, even a comprehensive measure like GDP, has to be taken with a grain of salt. Because of this, they are unlikely to be misled by the transitory statistical noise arising from residual seasonality."


(Reporting by Ann Saphir; Editing by Chizu Nomiyama)

  • Hedge Funds Are Betting On Catchmark Timber Trust Inc (CTT)
    Business
    Insider Monkey

    Hedge Funds Are Betting On Catchmark Timber Trust Inc (CTT)

    That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Catchmark Timber Trust Inc (NYSE:CTT). Is Catchmark Timber Trust Inc (NYSE:CTT) a good investment now? The smart money is taking a bullish view.

  • World
    Oilprice.com

    The Infinite Energy Resource We’re Overlooking

    Welcome to geothermal energy, the reason most religions depict Hell as a place deep underground and the reason why we may succeed in building a clean energy future for the planet without turning it into a disco ball of solar panels. Geothermal energy is, simply put, heat; heat that is generated from the decay of radioactive elements in the planet's mantle. This energy can be harnessed and used for heating and power generation.

  • Hedge Funds Dropped The Ball On Molecular Templates, Inc. (MTEM)
    Business
    Insider Monkey

    Hedge Funds Dropped The Ball On Molecular Templates, Inc. (MTEM)

    That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Molecular Templates, Inc. NASDAQ:MTEM). Molecular Templates, Inc.

  • Business
    Barrons.com

    Barron’s 10 Stock Picks for 2020

    The stock trades for 25 times projected 2020 earnings of $55 a share. But the effective P/E ratio is closer to 20 after adjusting for the losses in Alphabet's “other bets” businesses, like Waymo, the leader in autonomous driving technology, and net cash of $117 billion. Alphabet's revenues have regularly grown at a 20% quarterly pace, while Apple's sales fell in its latest fiscal year.

  • Dow Jones Futures: After China Trade Deal, Which Sectors Will Lead Stock Market Rally?
    Business
    Investor's Business Daily

    Dow Jones Futures: After China Trade Deal, Which Sectors Will Lead Stock Market Rally?

    Dow Jones futures rose slightly Sunday, along with S&P 500 futures and Nasdaq futures. The stock market rally hit record highs last week as President Donald Trump finalized a China trade deal with Beijing. Clearing up that uncertainty is good news for current winners such as Apple stock and AMD stock.

  • Business
    Oilprice.com

    The Best And Worst Oil Predictions Of 2019

    There's nothing like wild volatility to destroy the integrity of those high-end bankers and analysts who are brave enough to make oil price predictions year in and year out. At that time, the second year of the OPEC agreement was coming to a close; the U.S. had re-imposed sanctions on Iran four months earlier with waiver extensions; and the average price of a Brent barrel for December was changing hands at $56.50, compared to the month earlier average of $65.20. OPEC had agreed to cut production again for 2019.

  • Teens arrested in weekend mall shooting
    U.S.
    Associated Press Videos

    Teens arrested in weekend mall shooting

    Police say they have arrested two teenagers in connection with a shooting that wounded one man in a busy suburban Atlanta mall food court in the height of the Christmas shopping season. Dec.

  • Is Glaukos Corporation (GKOS) Going to Burn These Hedge Funds?
    Business
    Insider Monkey

    Is Glaukos Corporation (GKOS) Going to Burn These Hedge Funds?

    That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Glaukos Corporation (NYSE:GKOS). Glaukos Corporation (NYSE:GKOS) was in 11 hedge funds' portfolios at the end of September. GKOS investors should pay attention to a decrease in activity from the world's largest hedge funds of late.

  • Is Viking Therapeutics, Inc. (VKTX) A Good Stock To Buy?
    Business
    Insider Monkey

    Is Viking Therapeutics, Inc. (VKTX) A Good Stock To Buy?

    Is Viking Therapeutics, Inc. NASDAQ:VKTX) ready to rally soon? Investors who are in the know are in a pessimistic mood.

  • Business
    GuruFocus.com

    Apple Is a Great Company With a Dubious Valuation

    AAPL 30-Year Financial Data The intrinsic value of AAPL Peter Lynch Chart of AAPL As I discussed in a previous article for GuruFocus, Apple's growth over the past decade has been fueled in large part by the exceptionally popular iPhone smartphone platform. As mobile saturation has gradually gone global, opportunities for market expansion have petered out. Consequently, Apple has found itself in need of new growth drivers in order to keep its narrative - and high-flying share price - alive.

  • Business
    GuruFocus.com

    Top Insider Buys Highlight for the Week of Dec. 13

    MDT 30-Year Financial Data The intrinsic value of MDT Peter Lynch Chart of MDT Medtronic is an international medical instrument company headquartered in Dublin, Ireland, with their operational headquarters in Fridley, Minnesota. It is one of the world's largest medical equipment development companies, with operations in more than 140 countries. The company has a market capitalization of $152.16 billion; as of Dec. 13, it traded at $113.52.

  • Hey, good news America: Investors are bailing on stocks
    Business
    USA TODAY

    Hey, good news America: Investors are bailing on stocks

    Despite 2019 turning in the strongest year for stock investors in the last six, investors have been selling stock mutual funds at a record pace. So far, equity mutual funds and exchange-traded funds have lost over $135 billion to withdrawals – the largest amount since Refinitiv Lipper began tracking the flows in 1992. While the market has continued to power forward and investors have been exiting equity investments, cash on the sidelines has risen.

  • China Threatens Retaliation Should Germany Ban Huawei 5G
    Business
    Bloomberg

    China Threatens Retaliation Should Germany Ban Huawei 5G

    China's ambassador to Germany threatened Berlin with retaliation if it excludes Huawei Technologies Co. as a supplier of 5G wireless equipment, citing the millions of vehicles German carmakers sell in China. If Germany were to take a decision that leads to Huawei's exclusion from the German market, there will be consequences,” Ambassador Wu Ken said Saturday at a Handelsblatt event. The Chinese government will not stand idly by.

  • Here’s the formula for paying no federal income taxes on $100,000 a year
    Business
    MarketWatch

    Here’s the formula for paying no federal income taxes on $100,000 a year

    The question of how much can we earn without paying federal income taxes is relatively easy to answer for most people. The standard deduction for a married couple is $24,400 in 2019 (if both are under 65 years old), and the top of the 0% capital-gains tax bracket is $78,750. With our daughter, we also qualify for the child tax credit ($2,000), so we could actually generate another $13,333 per year in dividends or capital gains, taxed at 15%.

  • With Miss Jamaica's Miss World Win, Black Women Now Hold Five of The World's Biggest Beauty Pageant Titles
    News
    Meredith Videos

    With Miss Jamaica's Miss World Win, Black Women Now Hold Five of The World's Biggest Beauty Pageant Titles

    Black women currently hold five of the biggest beauty pageant titles in the United States, and the world.

  • Costco Wholesale Corporation Just Beat EPS By 11%: Here's What Analysts Think Will Happen Next
    Business
    Simply Wall St.

    Costco Wholesale Corporation Just Beat EPS By 11%: Here's What Analysts Think Will Happen Next

    Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent forecasts to see whether analysts have changed their earnings models, following these results. After the latest results, the 23 analysts covering Costco Wholesale are now predicting revenues of US$163.0b in 2020.

  • 3 Stocks With Fast-Growing Earnings
    Business
    GuruFocus.com

    3 Stocks With Fast-Growing Earnings

    The S&P 500 Index has grown its annual earnings per share (not adjusted to the inflation) by 41% over the past fivr years (about an 8.2% increase every year), pushing the share price up 53% to $3,168.80 at close on Friday. While past performance is not a guarantee of future results, if you choose companies that have reported more than 41% growth in their annual earnings per share, topping the S&P 500 over the observed period, your search may uncover good performers. GuruFocus has detected 6 Warning Signs with NVDA.

  • Have Insiders Been Buying Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN) Shares?
    Business
    Simply Wall St.

    Have Insiders Been Buying Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN) Shares?

    So we'll take a look at whether insiders have been buying or selling shares in Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN). Do Insider Transactions Matter? It's quite normal to see company insiders, such as board members, trading in company stock, from time to time.

  • If You Like EPS Growth Then Check Out JD.com (NASDAQ:JD) Before It's Too Late
    Business
    Simply Wall St.

    If You Like EPS Growth Then Check Out JD.com (NASDAQ:JD) Before It's Too Late

    Like the last firework on New Year's Eve accelerating into the sky, JD.com's EPS shot from CN¥0.98 to CN¥2.58, over the last year. Year on year growth of 163% is certainly a sight to behold. I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth.

  • Some GoPro (NASDAQ:GPRO) Shareholders Have Taken A Painful 92% Share Price Drop
    Business
    Simply Wall St.

    Some GoPro (NASDAQ:GPRO) Shareholders Have Taken A Painful 92% Share Price Drop

    Because GoPro is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

  • Here is What Hedge Funds Think About Antares Pharma Inc (NASDAQ:ATRS)
    Business
    Insider Monkey

    Here is What Hedge Funds Think About Antares Pharma Inc (NASDAQ:ATRS)

    While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, increasing oil prices and deteriorating expectations towards the resolution of the trade war with China, many smart money investors kept their cautious approach regarding the current bull run in the third quarter and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. In this article, we are going to take a look at the smart money sentiment surrounding Antares Pharma Inc (NASDAQ:ATRS).

  • Is Now The Time To Look At Buying Celsius Holdings, Inc. (NASDAQ:CELH)?
    Business
    Simply Wall St.

    Is Now The Time To Look At Buying Celsius Holdings, Inc. (NASDAQ:CELH)?

    Great news for investors – Celsius Holdings is still trading at a fairly cheap price. I've used the price-to-earnings ratio in this instance because there's not enough visibility to forecast its cash flows. The stock's ratio of 24.78x is currently well-below the industry average of 30.06x, meaning that it is trading at a cheaper price relative to its peers.

  • 3 Stocks to Enhance the Quality of Your Portfolio
    Business
    GuruFocus.com

    3 Stocks to Enhance the Quality of Your Portfolio

    ASML has a current ratio of 2.72, which is better than the industry median of 2.26. The current ratio is ranked higher than 59.7% of a total of 814 competitors operating in the semiconductors industry. The GuruFocus chart below shows that the trailing 12-month working capital was $7.67 billion and the trailing 12-month long-term debt was $3.44 billion as of Dec. 12, 2018.

  • Oracle Corporation Just Released Its Second-Quarter Results And Analysts Are Updating Their Estimates
    Business
    Simply Wall St.

    Oracle Corporation Just Released Its Second-Quarter Results And Analysts Are Updating Their Estimates

    Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest forecasts to see whether analysts have changed their mind on Oracle after the latest results. Taking into account the latest results, Oracle's 29 analysts currently expect revenues in 2020 to be US$40.0b, approximately in line with the last 12 months.

  • Hedge Funds Are Buying EQT Midstream Partners LP (EQM)
    Business
    Insider Monkey

    Hedge Funds Are Buying EQT Midstream Partners LP (EQM)

    That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like EQT Midstream Partners LP (NYSE:EQM). EQT Midstream Partners LP (NYSE:EQM) was in 11 hedge funds' portfolios at the end of September. EQM shareholders have witnessed an increase in support from the world's most elite money managers in recent months.