Welcome to Boss Biden’s America! It reminds of woefully corrupt Boss Tweed and Tammany Hall in New York City. Today’s inflation report revealed that core CPI YoY was 4.7%. Ugh!
While energy prices are down since last year, Food prices are still up 4.9% YoY and shelter (housing) CPI is up 7.7% YoY.
Expectations for this morning’s must-watch CPI print were for a MoM and YoY rise in the headline, and modest slowing of the core YoY. However, The Fed will be watching its new favorite signal – Core Services CPI Ex-Shelter – which reaccelerated in July (+0.2% MoM, and from +3.9% to +4.0% YoY).
The headline CPI rose 0.2% MoM in July (as expected), the same as in June, pushing the YoY up to 3.2% (from 3.0% in June) but below the 3.3% expected…
Source: Bloomberg
Today’s increase in CPI YoY broke the record-equaling streak of 12 straight months of declines.
Core CPI rose 0.16% MoM, with the YoY growth in prices slowing to 4.7%.
Source: Bloomberg
Both Goods and Services inflation (YoY) slowed in July – but Services remain extremely high at +6.1%…
Source: Bloomberg
On an annual basis, the index for all items less food and energy rose 4.7% over the past 12 months with the shelter index rising 7.7% over the last year, accounting for over two-thirds of the total increase in all items less food and energy.
Other indexes with notable increases over the last year include motor vehicle insurance (+17.8 percent), recreation (+4.1 percent), new vehicles (+3.5 percent), and household furnishings and operations (+2.9 percent).
Source: Bloomberg
Taking a closer look at the all important shelter index, while it is still growing both sequentially and annually, the slowdown in growth is increasing more visible:
- Shelter inflation up 7.69% YoY in July vs 7.83% in June, lowest since Dec 22; also up 0.43% MoM, lowest monthly increase since Jan 22
- Rent inflation up 8.03% in July vs 8.33% in June, lowest since Nov 22; also up 0.41% MoM, lowest since March 22
The silver lining here, as noted by former Fed staffer Julia Coronado, is that “we are seeing core inflation slow before the expected big step down in rent/oer” which is great news as “lots of price sensitivity in travel and core goods that was slow to take hold but is now fully coming through.” In other words, if and when rent/shelter inflation actually post a decline (with the usual 12-18 month BLS lag), the Fed will be scrambling to fight inflation.
Turning to the wage aspect, for the second month in a row, ‘real’ wages rose YoY in July (but barely, +0.2%), and it appears that we are about to dip back into real contraction next month.
Source: Bloomberg
So the question becomes – is this an inflection point in inflation? (or is M2 still leading the way?)
Source: Bloomberg
Yet, Fed Funds Futures are pointing to no further Fed rate hikes.
With House Republicans releasing bank records showing over $20 million in payments to Biden family, associates, and Democrats denying any wrongdoing, I think we are seeing the Biden Administration as a rebirth of New York City’s Tammany Hall corrupt political machine led by Boss Tweed. Since Biden’s malfeasance/influence peddling occurred when he was Vice President under Barack Obama (aka, Barry Soetoro), Obama is the new Bathhouse John Coughlin the woefully corrupt Chicago Alderman and Hunter Biden is the new Hinky Dink (Michael Kenna, also a woefully corrupt Chicago Alderman).
Bathhouse Barry Soetoro, Boss Biden and Hinky Hunter at a basketball game.
Confounded Interest - Anthony B. Sanders 
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