Tag: price inflation

Price Inflation Persists. Now What?

Price Inflation Persists. Now What?

Core CPI accelerated month-to-month to 0.5% (from 0.4% in January), as "Shelter" accelerated to 0.8%. Our view is that the Fed will continue to hike rates but may slow the pace of QT, particularly as it relates to Treasuries. The Fed says it will maintain interest rate hikes as the Banking sector stumbles. More importantly, … Continue reading Price Inflation Persists. Now What?

Inflation Will Persist In The U.S.

Inflation Will Persist In The U.S.

Look to the late 1970's and early 1980's in the U.S. or look at what is happening in Europe today - inflation tends to persist. Today's EU release: Year-over-year price increases in the Energy sector slowed, yet price increases for all items excluding Energy experienced accelerated increases. Food, alcohol and tobacco experienced a 15.0% Y-O-Y … Continue reading Inflation Will Persist In The U.S.

Why The Fed Should Hike By 50 BPS

Why The Fed Should Hike By 50 BPS

The sooner the Fed gets to where it is going, the sooner it may pause and observe. In addition, Treasury yields remain negative across the yield curve which is not long-term healthy for the economy. The Effective Fed Funds rate range stands at 4.25-4.50%. If the Fed believes that the upper bound should sit at … Continue reading Why The Fed Should Hike By 50 BPS

CPI: A Long Way To Go To 2%

CPI: A Long Way To Go To 2%

Headline CPI came in at 6.5% year-over-year and down -0.1% for the month of December. Core CPI was up 5.7% year-over-year and up 0.3% for December, up from 0.2% in November. Readers know how we feel about price inflation - it is higher than what the government reports. Take "eggs" for example which we recently … Continue reading CPI: A Long Way To Go To 2%

Chip Bonanza Or Money Trap?

Chip Bonanza Or Money Trap?

The problem with the Biden Administration's $76 billion CHIPS Act is that the Federal Government is expert at creating damage and waste. So, what may go wrong with the CHIPS act? Price inflation. Those Trillions of Dollars of COVID stimulus checks were the very cause of price inflation. Any time a Central Bank prints money, … Continue reading Chip Bonanza Or Money Trap?

Price Inflation Ate Savings

Price Inflation Ate Savings

Price inflation was the story of 2021 and 2022. Price inflation is apparent in the Personal Income figures below (see table). The below table includes raw data from the Bureau of Economic Analysis combined with TEK2day analysis. Goods and Services price increases and Interest Expense increases significantly outpaced Personal Income growth. (See the links below … Continue reading Price Inflation Ate Savings

CPI Week: Price Inflation Remains Too High

CPI Week: Price Inflation Remains Too High

The Cleveland Fed estimates 6.3% Core CPI for November. CPI data will be published on Tuesday. The 6.3% Core CPI estimate sounds about right. One would expect Core CPI to be flat to slightly down in November. I would expect the Fed to push its Fed Funds Rate north of 5% in 1H 2023 and … Continue reading CPI Week: Price Inflation Remains Too High