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Comment by teraflop | Hacker News Reader

As usual, take headlines about inflation with a grain of salt.

Yes, the year-over-year inflation reached a new peak. But the month-over-month inflation rate has actually been declining since last October: https://www.bls.gov/news.release/cpi.nr0.htm

So when organizations publish a new article every month saying inflation is "accelerating", they're being incredibly misleading.

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Not that misleading. If you zoom out 5 years or more, you'll note increased slope of the CPI index over the past couple of years.

https://fred.stlouisfed.org/series/CPIAUCSL

It's fair to say that inflation has been at an accelerated rate over a time period that makes sense to most folks. Saying that it has decreased month-to-month is more misleading in my opinion. If you were to pick any random period in time, chances are inflation wouldn't be increasing as fast as it has been over those recent "declining" months.

To be fair, you ought to select the option to put it on a (natural) log scale. The effect you note is still apparent, but the log scale makes one's tendency to compare it to the 70's more fair.

Most of the time, a month-to-month comparison might miss the forest for the trees. Except that in this case, the forest in question has just gone through a pandemic.

My math might be wrong, but according your source isn't the annualized month-to-month inflation 7.5%?

(1+0.6/100)^12 = 1.0744.

The year-to-year (multiply all seven rates and then power to 12/7) is 7.1% which is pretty close to 7.5% anyway.

(Also, note that the decrease over the last two months is probably due to the Christmas peak ending. Best case scenario, pie in the sky, for inflation is 3.6% which is higher than my mortgage rate)

If you still have a lot of time left on your mortgage it may be beneficial to refi

Sorry, I meant higher than my mortgage. Corrected.

I already had a low rate from ‘17 and we refinanced it again.

I got 2.75 on mine, which is ridiculously low. My parents paid something like 11-12% on their first house.

How much did they pay for that house though?

exactly!!

i would rather pay less for the house.

You can get cheap houses in the US if you’re willing to live outside select cities. If you’re an IT guy with potentially little impact on your salary.

That being said, we’re in this weird regime where interest rates set the market price of homes (since people can only afford $x/month no matter the interest rate with no wiggle room)

they paid more than double then what they bought it for. Interest at 11% over 30 years is larger than the principle.

Why not refinance when rates decline?

If they fall within the lifetime of the loan. 11% interest rates werent a one year thing.

That being said, I keep forgetting refinancing is one of the great American blessing we dont enjoy elsewhere. And Ive refinanced twice already :D

They did not hold the house very long :)

Thanks for this source, i believe in the last fed meeting JP said he expected us to be on track for 2% this year but i don’t see how that’s possible if we are already at .6 a month in, maybe it will drastically keep going down MoM for this year and average down to 2%?

You want me to take the headlines about inflation with a grain of salt? Fair enough. All headlines should be taken with a grain of salt.

But what do you want me to do about the actual inflation I'm experiencing in day-to-day life, that indicate to me the inflation numbers in the headlines aren't even telling the full story?

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