Core CPI

“Times and conditions change so rapidly that we must keep our aim constantly focused on the future”

Newsletter /

Since January 2021, government measures of core inflation are up 18%-19% if food, energy, and shelter are excluded. However, Food prices are up 25%, Energy prices are up 32%, and Shelter costs are up 22%. Perhaps more critically, Services Inflation, which was up +4.7% in the last twelve months, is up close to 50% over the same time period. Maybe prices for the items that are stripped out of Headline Inflation statistics (i.e., necessities) will fall if we have rising unemployment (and a recession.) But, for now, rising service prices are holding up progress on inflation.

“Times and conditions change so rapidly that we must keep our aim constantly focused on the future” Read More »

“The ancient art of deception is to present two lies and get the people arguing viciously about which is true.”

Newsletter /

When the Fed finally started raising interest rates in March 2022, Mr. Powell reminded investors that the Fed’s primary objectives were full employment and stable prices. The Fed is now as close as it has been to achieving those objectives since the pandemic.
A balanced and patient Fed has been a stabilizing force in a chaotic world. Global GDP is rising, and headline inflation pressures in most countries appear to be abating. Perhaps the Fed’s duel mandate is on the verge of being realized.
Mr. Powell’s Fed last hiked rates in July 2023, yet the economy appears to be slowing more quickly now than it has since the Fed paused. Indeed, reporting to Congress last week, Mr. Powell sounded even more dovish than he did at the G7 confab 10 days ago. He seems convinced the Fed is succeeding in reducing inflation and is on track to reach its target objective of 2%. Maybe he’s right.

“The ancient art of deception is to present two lies and get the people arguing viciously about which is true.” Read More »