Fed’s Favorite Inflation Indicator Surges In May To Highest Since 1991 (Core PCE Deflator Hits 3.39% YoY, PCE Overall YoY Hits 3.91%)

Today’s inflation numbers, particularly the Fed’s favorite inflation indicator Core PCE Deflator, rose 3.39% YoY and the overall PCE Price index rose 3.91%

I love to throw in home prices, as housing in typically the largest item in a household’s consumption bundle. The last Case-Shiller national home price index was up 13.19% YoY while M2 Money has “slowed” to 13.94% YoY.

Here is a picture of The Fed’s System Open Market Account holdings of T-Notes, Bonds and Agency MBS along with the slosh (excess temporary cash in the banking system). That’s a whole lot of slosh in the banking system!!

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