Fed rate increase = lower hifi prices?

@headphonedreams I just looked at speakers and many brands have increased or is increasing their prices with 20-40% !
I have a distinct feeling these new prices will not go down much the next 2 years.

At a basic level, input prices have increased. How much wood (mdf) goes into a speaker? In America, wood/lumber prices have tripled or quadrupled since 2020. That must hurt a little bit.

There may also be issues regarding speaker/transducer availability - I’ve seen stories here about folk having some difficulties securing those round things.

And that is all I know about speaker construction! As for all that air inside, well, its like a bag of chips, innit?

I’d reckon that the market for speakers is fairly competitive, manufactured both in America and internationally, together with "cottage" (independent) outfits - although international shipping costs have also increased substantially.

That’s my simple take on the supply side. The demand side (buyers) - is another story, but my intuition suggests that demand for audiophile kit is pretty inelastic which does allow dealers to take advantage of any supply issues to bump up prices if stock availability is a bit hard to come by, without suffering much loss in turnover.

I reckon 20 - 40% is quite explainable in the circumstances.

In the meantime, estimates of official monthly inflation figures due out on Wednesday in the US are around 0.2% or so. Yeah.

@noske , purely IMHO at this point, but I would think the high high end is pretty inelastic since for the people buying this, it is chump change. I expect the middle-bottom end of the audiophile world to be rather elastic. $100K on a hobby with a $1M+ equivalent salary is "reasonable". There is a lot of disposable in $1M+.  $20K on a $200K salary, or $10K on a $100K salary is a much bigger chunk out of disposable income. For "family" people, there will be an expectation to maintain other aspects of life, including vacations, etc. especially as the pandemic ends, so I could see audio dropping down the list of spends.

@deludedaudiophile I concede there are other aspects on the demand side unique to hifi without going into details. Plenty. What you are thinking about is actually different markets. That's a significant aspect.

Except to point out that elasticity is a marginal (in the economics meaning of the word, incremental) concept. Its quite a neat thing to understand in a variety of contexts - being a ratio, it is almost unit invariant.

Maybe a bit like gain in electronics?

Market is still not happy. Sometimes the best stock investment advice is not to invest.

https://fortune.com/2022/05/02/morgan-stanley-stocks-fall-sp-500-earnings-growth-slows/

Whose crystal ball is best?

That is an EXCELLENT question. In all my years of experience the answer that seems most likely to me is NOBODY’S. And that certainly includes me. Any model can make someone a hero at a point in time, then the market shifts and you’re a dinosaur. Anecdotal note: after Elaine Garzarelli called the crash in 1987 she was on top of the investment strategy world, but she was absolutely paranoid after that because she knew her rep would be tied to calling when to get back INTO the market. She’d call me monthly (she was a client of ours) to see if our models were supporting what hers were saying to give her peace of mind that she wasn’t missing the boat. Point is, even the best know their crystal ball is right only some of the time.

Anyway, It seems I’ve come across as an arrogant ass here, and for that I apologize. The fact is, the longer you do this and if you’re a realist and smart, the biggest thing you learn is humility. My crystal ball is possibly no better than anyone else’s, although I’ve had the benefit of unlimited data and the ability to test and refine it over time. And I agree with many of the insightful points that have been made here. The only difference is I’ve had the opportunity to test my models and refine them into fairly reliable predictive buy/sell indicators over close to 40 years. If you believe in your assertions made here, I’d encourage you to track your own models against the market and try to create upper and lower bounds bounds that denote reliable buy or sell signals over time. Then you’ll be able to put your ideas to work for you in a truly objective and quantifiable way if you really believe in them. I’ll warn you ahead of time, it’s not quite as easy as it sounds, but it can be well worth the effort. I’ll just leave it there and say peace out. Best of luck!