Following yesterday’s Federal Reserve announcement, an inflation report, and a stagnant interest rate, CBS News and NBC News spoke highly of the changes regardless of the truth of the US economic pain. Though the hosts eventually spoke about the issue, in the end, the segment emphasized this false optimism and normalizing the economic situation of the country, while disregarding President Biden’s part in it all. Just in time for the election.
Business analyst Jill Schlesinger delivered a truly naive view of a very real problem for many Americans and spoke of the prices of everyday purchases with great positivity despite many coming down by less than a percentage point:
A little bit. So look at some of the categories that actually went down last month. Gas prices! Yay! Right ahead of the summer driving season. (…) Clothing. That’s down. (…) Groceries were flat, but new and used car sales — sorry — prices down. Unfortunately, things are still higher than they were, of course. We think housing, you think insurance costs. Those are still persistently high.
A gross understatement and undersight of the cause of this event shows that this optimism may be used to mask more.
Schlesinger went on to speak about this issue, putting lightly, what is clearly the leading cause of such tribulation: “You know, what’s happened is prices are 22 percent higher than they were from four years ago. That’s why you don’t feel crazy if you say like I know it’s getting better, but it still hurts.”
In an exclusive statement to NewsBusters, former president of the Reserve Bank in Kansas City and former vice chairman of Federal Deposit Insurance Corporation, Dr. Thomas Hoenig said otherwise, that things won’t be changing any time soon:
DR. THOMAS HOENIG: As long as rates stay at this level inflation will stay for some time in the three percent or a little bit better than three percent range going forward from here. And unfortunately, it will be necessary to wait a very long time for rates to come down so long as they’re not going to raise interest rates any further. So people will have a long period of three percent. But eventually, if it is even modestly tight, it will decline. But we’re talking 2026-2027 before you see it come down even close to two percent.
There was similar obtuse praise for the negligible decrease in inflation on NBC’s Today. “Clothing prices down,” senior business correspondent Christine Romans touted. “One of the reasons is because the retailers are starting to cut prices because we, consumers, are marching with our feet. We’re going across the street if the prices are cheaper.”
But she couldn’t seem to bring herself to actually vocalize what the decrease in the price of clothes actually was. Luckily, it was on the screen: 0.6 percent.
She also insulted the economic intelligence of average Americans, suggesting they’ll be happy now because their “fast food lunch is cheaper, that’s something you can get your heads around.”
The truth was that these numbers were no cause for great excitement, that under the Biden Administration, inflation was at a 40 percent high, and that above all it would not be getting any better any time soon.
The transcripts are below. Click “expand” to read:
CBS Mornings
6/13/2024
7:23:33 AM EST
CBS Mornings
6/13/2024
7:23:33 AM EST
Run Time: 1 minute 46 seconds
NATE BURLESON: In today’s money watch we are talking about something we all care about, the high cost of living. Inflation has been slowing down. Last month it was up by only 3.3 percent over the year. That’s still higher than what the Federal Reserve wants to see. So yesterday the Fed left interest rates unchanged.
CBS News Business analyst Jill Schlesinger is here with everything you need to know that can help your bottom line. Alright, how you doing?
JILL SCHLESINGER: Good.
BURLESON: Okay. So why are consumers so concerned, and will they be feeling some relief soon?
SCHLESINGER: A little bit. So look at some of the categories that actually went down last month. Gas prices! Yay! Right ahead of the summer driving season.
BURLESON: Yeah.
SCHLESINGER: Clothing. That’s down.
BURLESON: Okay.
SCHLESINGER: Groceries were flat, but new and used car sales — sorry — prices down. Unfortunately, things are still higher than they were, of course. We think housing, you think insurance costs. Those are still persistently high.
BURLESON: President Biden, he says while prices are still too high, wages are rising by more than the inflation rate. So why don’t people feel better about the economy we’re in now?
SCHLESINGER: You know, what’s happened is prices are 22 percent higher than they were from four years ago. That’s why you don’t feel crazy if you say like I know it’s getting better, but it still hurts.
BURLESON: Yeah.
SCHLESINGER: And I just want to put that in context. 22 percent higher from four years ago. The previous four years, we had seven percent gains. So three times higher. Yes, President Biden is right, wages are keeping up with inflation now. But they didn’t for four whole years.
BURLESON: So when can we expect to see a cut in interest rates?
SCHLESINGER: Alright so Jerome Powell gets up there and says no cut right now.
BURLESON: Right.
SCHLESINGER: There’s going to be another meeting in July. But he says they think, the Fed thinks one more cut before the end of the year. We don’t know when, maybe September.
(…)
NBC’s Today
6/13/2024
07:16:03 AM EST
NBC’s Today
6/13/2024
07:16:03 AM EST
Run Time: 2 minutes 33 seconds
CRAIG MELVIN: Good morning to you as well. There are positive new signs on the state of the nation’s economy this morning. Better than expected numbers show that inflation is cooling slightly. The federal reserve encouraged by the progress but still holding interest rates steady, at least for the time being. So what does it all mean for your wallet? NBC’s senior business correspondent Christine Romans here to break it down for us. So you called it yesterday. Rates remained unchanged, but we did get this inflation report that was slightly better than expected. So why wouldn’t the central bank say, you know what, little bit better. Let’s drop the interest rates.
CHRISTINE ROMANS: They want to be convinced, they want to be convinced that inflation is really, really improving. So they’re going to wait for some more data, they’re penciling in one rate cut this year and then maybe several next year. So there is, we can see relief in the future if you can get inflation under control.
But also Craig, to be honest the economy is strong and Jerome Powell the Fed chief said it in a lot of different ways yesterday. He said that the U.S. economy is moving forward nicely. It is growing. The job market is strong. The unemployment rate is near historic lows and has been for a very long time. The U.S. economy doing well. They’re not quite ready to cut interest rates right now.
SAVANNAH GUTHERIE: You and I were talking about this back stage yesterday. I mean, the Fed has said we want inflation to go back to two percent. It’s hovering around three-something percent right now.
ROMANS: Yeah.
GUTHERIE: I mean are they really going to wait until we get that magic number of two percent before cutting interest rates which is tough on the economy.
ROMANS: And that’s a good point. Because they’re penciling in one rate cut this year but they’re not saying that their indicator, the PCE, their inflation gauge is going to get back to two percent yet. So they might have to – they might have to just bite the bullet and cut rates when they don’t quite get to two percent just yet.
But when you look at these inflation numbers, I think, around the kitchen table this morning, this is what people are really, really interested in. The Fed rate cut seems so over here, but when your fast food lunch is cheaper, that’s something you can get your heads around. And you’re gonna see a summer of value in some places. Grocery stores, I think, at the fast food drive-thru, they’re going to see some lower prices starting to come.
HODA KOTB: Well let’s talk vacations, too. A lot of people are planning that out right now and with this economic news, how does that play out?
ROMANS: Gas prices are down year-over-year and gas prices were a relief in this inflation number yesterday, air fare was down from April to May by about three percent. So that’s some good news. You’re seeing – and clothing, clothing prices down. One of the reasons is because the retailers are starting to cut prices because we, consumers, are marching with our feet. We’re going across the street if the prices are cheaper. So you’re starting to see prices decline on some of those things we rely on everyday.
MELVIN: Summer of value. I like that.
ROMANS: I know. I just coined that.
CRAIG: Thank you, Christine. Summer of value.
Dr. Thomas Hoenig
6/13/2023
11:57:00 AM EST
Dr. Thomas Hoenig
6/13/2023
11:57:00 AM EST
DR. THOMAS HOENIG: Right now the way policy is being administered, there is the presumption that it is restricted policy and therefore inflation will go down. I’ve argued that if you look at the fundamentals of where the current policy rate is relative to what real rates are given inflation, that it is not restrictive. It is what I call at best, a steady state. In other words, as long as rates stay at this level inflation will stay for some time in the 3% or a little bit better than 3% range going forward from here. And unfortunately, it will be necessary to wait a very long time for rates to come down so long as they’re not going to raise interest rates any further. So people will have a long period of 3%. But eventually, if it is even modestly tight, it will decline. But we’re talking 2026-2027 before you see it come down even close to 2%. (…)
Unfortunately inflation is going to be within the 3% range for an extended period.