Wednesday, September 14, 2022

I

 


thought they said it had peaked?






"The Consumer Price Index (CPI) in August reflected an 8.3% increase over last year and a 0.1% increase over the prior month, the Bureau of Labor Statistics reported Tuesday. Economists had expected prices to rise 8.1% over last year and fall 0.1% over last month, according to estimates from Bloomberg."


"On a "core" basis, which strips out the volatile food and energy components of the report, prices rose 6.3% over last year and 0.6% over the prior month in August."

"Expectations were for a 6.1% annual increase and 0.3% monthly increase in core CPI."

(Thats the one to watch right now, "core" inflation with energy and food taken out. The energy # is being manipulated by the drawdown of the Strategic Petroleum Reserve right now and will continue for another month or two.)


"The unexpected rise in Tuesday's headline figure came despite a 5% drop in energy prices over the month, driven by 10.6% plunge in the gasoline index."

(See above remarks about SPR drawdown.)


"The reading also likely affirms that Federal Reserve officials will raise interest rates by 75 basis points at their policy-setting meeting Sept. 20-21."

(Raising interest rates is the only tool they have to combat inflation and if studies are correct? 50% of inflation is due to to much "liquidity" in the market (Fed printed to much $ and bought to many Bonds) and another 30% of inflation is due to supply shocks in food and energy, so the only tool the fed has to fight the problem of inflation? raising interest rates and quitting injecting $ into the system with bond purchases? Is only going to affect 20% of the problem. INFLATION IS HERE AND ITS NOT GOING TO GO ANYWHERE FOR A WHILE! Just wait till we quit releasing oil from the SPR, then what do you think is going to happen to inflation? It's not the prices going up, that's not inflation. Its the amount of $ in the system that has been "inflated" that is why the dollars purchasing power has decreased, to much of anything  lessens its value, even money. $ isn't worth what it was a short while ago because weve created to much of it and interest rates just are not going to fix it. The only thing thats ever fixed it aint gonna do it this time.)


“Today’s inflation data cements a third consecutive 0.75% increase in the Fed funds rate next week," Principal Global Investors Chief Global Strategist Seema Shah said in a note."



"Headline inflation has peaked but, in a clear sign that the need to continue hiking rates is undiminished, core CPI is once again on the rise, confirming the very sticky nature of the US inflation problem," Shah added, pointing out that 70% of the CPI basket logged an annual price rise of more than 4% month-on-month. "Until the Fed can tame that beast, there is simply no room for a discussion on pivots or pauses," Shah said.

(Okay where to start? Headline inflation, the number with food and energy included, has peaked according to this talking head. Apparently she doesn't  know about the SPR drawdowns coming to an end here in a short while, then what does she think is going to happen?

"core CPI is once again on the rise" 

Here is your "core" CPI for 2022:

2022
Jan 6.0
Feb 6.4
 March 6.5  
April 6.2 
May 6.0 
June 5.9 
July 5.9 
August 6.3

.3 of a %? That is all it fell over three months from April till July? How about it never really dropped but more  like it plateaued during that time frame and is now right back to doing what it was doing before?


"Tame that beast"

Interesting choice of words.






"The higher-than-expected inflation print also comes after a round of more aggressive talk from central bank officials, notably Vice Chair Lael Brainard, who said last week: "While the moderation in monthly inflation is welcome, it will be necessary to see several months of low monthly inflation readings to be confident that inflation is moving back down to 2 percent."

(Moderation? 
Inflation still near 40 year highs are were gonna be happy about "Moderation"? 
What Moderation?)

"Brainard added, “We are in this for as long as it takes to get inflation down."

(Translation:
We know we cant do anything about it but were gonna go through the motions just as long as we can anyways.)


"Meanwhile, the food at home index rose 0.7% during the month, with all six major grocery store food group indexes rising.

Housing prices continued their climb, with the cost of shelter recording its largest increase month-on-month increase — 0.7% — since January 1991. Over the last year, the shelter index jumped 6.2%, accounting for roughly 40% of the broader index increase in all items excluding food and energy."

Yeah, Headline inflation has peaked...
And when we quit the drawdown of the SPR?
Energy prices are going to continue to moderate.?

Sure...right...gotcha...

I look like I got a bachelors degree in Economics from the London School of economics? With Honors? That individual really doesn't know what happens when the SPR drawdown stops?

Gimmie a break...

Somebody has been trying to tell you what is really going on...

Yup...



On a side note along these lines, last week I was called "insightful" on two occasions...
So I looked it up to get the true meaning of the word:

Definition of insight

an instance of apprehending the true nature of a thing, especially through intuitive understanding:

penetrating mental vision or discernment; faculty of seeing into inner character or underlying truth.

OTHER WORDS FOR INSIGHT
perception, apprehension, intuition, understanding, grasp.

I'll take that :-).
All day long :-).

I love you Baby :-).










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