The Markets Love The New CPI But Should You?
I really feel like people are in disillusion as to what's happening right now. Or are simply blinding just going head first in and simply don't care anymore.
The CPI number which comes out monthly gives us a look at how inflation is in the USA. Well at least to a point as the CPI number doesn't show all inflation happening. In order for that we will have to break down each of the sectors which I'll get to later in this article.
This chart shows us that compared to last month the CPI index number has gone from 3.5% to 3.4% which for some reason has the stock market and crypto pumped lol.
The real time we know we are on the right track again is when that inflation number continues to fall month over month which is not what we have been seeing. Instead we have been bouncing from 4% to 3.2% for the last 10 months! Yes the last 10 months inflation has remained at these elevated rates and it's clearly not hopeful yet for us to be at that 2% target any time soon.
Next month and the month after that will be the more telling option as for how recovering is going to that 2% inflation goal again. It will also tell us how hopeful we should be for lower interest rates coming into the end of the year which is still a sold 6 months away which is a rather large amount of time.
The Illusion
I'm going to call it an Illusion because that's the way I personally see it. An Illusion that the fed will decrease rates this year. That's mainly because while inflation numbers might look like they have come down month over month we can clearly see we were at this point just 10 months ago.
Even with super high interest rates and holding strong for nearly a year now we simply have not seen inflation come down anywhere near where it should be. Now this isn't only a fed thing. The USA continues to spend way too damn much and it's legit insane why they keep doing it. It's cause most of its citizens to become even more untrusting of their government simply because they can't balance the sheets and constantly keep trying to tax people more as their "fix" well your going to make a serious amount of enemies that way and rightfully so.
At the moment the CME group is predicting a possible reduction in the fed interest rate at 50% possible.
For me this just doesn't make sense. It's very clear that if the fed reduces the rates too soon we quickly find ourselves in a massive increase of inflation and a recession every time! To me this rates need to remain high until we hit that 2% target then it could be considered for reduction slowly after that point.
But of course you have elections and people pleasing in the short term even though it will kill you in the long term. It's completely bonkers!
For myself I see us staying high. There's simply new pressures on the USD and a world war going on. What are you thoughts?
Posted Using InLeo Alpha
I really feel like people are in disillusion as to what's happening right now. Or are simply blinding just going head first in and simply don't care anymore.
The CPI number which comes out monthly gives us a look at how inflation is in the USA. Well at least to a point as the CPI number doesn't show all inflation happening. In order for that we will have to break down each of the sectors which I'll get to later in this article.
This chart shows us that compared to last month the CPI index number has gone from 3.5% to 3.4% which for some reason has the stock market and crypto pumped lol.
The real time we know we are on the right track again is when that inflation number continues to fall month over month which is not what we have been seeing. Instead we have been bouncing from 4% to 3.2% for the last 10 months! Yes the last 10 months inflation has remained at these elevated rates and it's clearly not hopeful yet for us to be at that 2% target any time soon.
Next month and the month after that will be the more telling option as for how recovering is going to that 2% inflation goal again. It will also tell us how hopeful we should be for lower interest rates coming into the end of the year which is still a sold 6 months away which is a rather large amount of time.
The Illusion
I'm going to call it an Illusion because that's the way I personally see it. An Illusion that the fed will decrease rates this year. That's mainly because while inflation numbers might look like they have come down month over month we can clearly see we were at this point just 10 months ago.
Even with super high interest rates and holding strong for nearly a year now we simply have not seen inflation come down anywhere near where it should be. Now this isn't only a fed thing. The USA continues to spend way too damn much and it's legit insane why they keep doing it. It's cause most of its citizens to become even more untrusting of their government simply because they can't balance the sheets and constantly keep trying to tax people more as their "fix" well your going to make a serious amount of enemies that way and rightfully so.
At the moment the CME group is predicting a possible reduction in the fed interest rate at 50% possible.
For me this just doesn't make sense. It's very clear that if the fed reduces the rates too soon we quickly find ourselves in a massive increase of inflation and a recession every time! To me this rates need to remain high until we hit that 2% target then it could be considered for reduction slowly after that point.
But of course you have elections and people pleasing in the short term even though it will kill you in the long term. It's completely bonkers!
For myself I see us staying high. There's simply new pressures on the USD and a world war going on. What are you thoughts?
I was in meetings all day today, so I really couldn't pay attention to what the markets were doing. Probably for the best!
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