Team ‘Transitory’ Gets Small Win. But Caveats Abound
The most anticipated US inflation data since last month's numbers showed price pressures abated more than expected in July. Or at least on the core gauge.
Core prices rose just 0.3% from the prior month, the government said Wednesday. That was less than the 0.4% economists expected (figure below), and just a third of the relatively torrid pace witnessed in April and June.
The headline gauge rose 0.5% last month, matching estimates.
Obviously, no one is "vindicated" by one month's data. And
An eye on China Covid and it’s effects on supply lines will affect the transitory story.
Basically good news for a Wartime economy.
Without gasoline and gold in the headlines every day this really can’t be the same as the inflation earlier in my lifetime.
Stats are transitory until the economy reboots and readjust to a major shock. The Fed is wise to wait. Conjecture about tapering is fine and justified. The federal reserve making an announcement is premature until much later this year.
There is no “food” index for Little Debbies because Little Debbies are not actually food.
I agree on your conjecture about the Fed’s wait ‘n see attitude. I’m going with Guggenheim on this next timeline of Covid cases. They were right on the mark during the start of all this kerfuffle. Maybe I’ll try a little bet on 3X Inverse holdings until November.
H-Man, nice job of sketching the good, the bad and the ugly. Toss in some climate change —– droughts, floods, fires and ugly gets a smiley face when it comes to food (we will eat vegetables and fruit when there is nothing else on the table according to my mother).