Morning Update

 I know we have been talking a LOT about CPI, but it’s important that we really look into the breakdown of the CPI and look at where the month-over-month inflation rates are accelerating the most. Food and Energy are reaccelerating, and that means the three Month SAAR calculations which are used for the CPE are reaccelerating, which is NOT good for the proposition that demand is being destructed. So it means the Fed is not only NOT succeeding in pressing demand and they obviously CAN NOT create supply.

Just to provide extra info CPI and Core CPI are calculated based on breakdowns of different aspects of the economy but what they also evaluate is if the acceleration is increasing on a monthly, quarterly or annual rate, but we’re seeing that we are accelerating on all fronts, which means we Can NOT be approaching deceleration (which is what many investment firms and banks were baking into the models).

wWe have a very broad-based inflation problem that can NOT be blamed squarely on supply issues, because this is the HIGHEST inflation rates we have EVER seen since the data has been collected in areas like Sticky CPI and Core CPI. So…BUCKLE UP! The rollercoaster rides you up to DROP YOU DOWN!

Morning Update – June 13th, 2022

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