The Next CPI and PCE reports are July 14 and 30 respectively. What’s ahead?
The CPI and PCE projections are from the Cleveland Fed Inflation Nowcast.
Year-Over-Year Nowcast June
- CPI: 3.92 percent
- Core CPI: 2.85 percent
- PCE: 3.88 percent
- Core PCE:3.43 percent
Year-Over-Year Nowcast July
- CPI: 3.71 percent
- Core CPI: 2.81 percent
- PCE: 3.84 percent
- Core PCE:3.47 percent
These are uninspiring numbers to say the least.
Notable, core PCE forecasts are still rising, and that’s the Fed’s preferred measure of inflation.
Core measures exclude food and energy.
CPI and PCE Month-Over-Month Percent Change Plus Nowcast
Month-Over-Month Nowcast June
- CPI: -0.06 percent
- Core CPI: 0.23 percent
- PCE: 0.10 percent
- Core PCE: 0.28 percent
Month-Over-Month Nowcast July
- CPI: 0.00 percent
- Core CPI: 0.23 percent
- PCE: 0.11 percent
- Core PCE: 0.28 percent
Core Projections Problematic
- 0.23% monthly annualizes to roughly 2.80% per year.
- 0.28% monthly annualizes to roughly 3.41% per year.
Those who like to exclude food and energy are now stuck in their own trap.
Energy rates to be a big drag on the month-over-month measures in June and July.
However, the core numbers the Fed likes to use, especially PCE remain stubbornly high.
Looking ahead to October, there is now 79 percent chance of at least one hike with a 33 percent chance of multiple hikes.
Iran Not Helping
Trump’s latest maneuver in Iran does not help at all.
West Texas Intermediate and Brent oil prices are up over three percent to $73.81 and $78.50 as I type.
The long bond yield is up slightly to 5.085 percent.
Iran understands the setup more than Trump.
I said at the outset of the war that Iran’s number one goal was to punish Trump as much as possible with no regard to the damage it would suffer doing so.
That has been an accurate assessment, and one that Trump fails to understand.
Yet, Trump boasts today about winning and still says the US controls the strait. This weekend, traffic came to a near standstill again.
We call this winning. … By Iran.
Hooray! We Have a New Stated Goal in Iran.
Please note Hooray! We Have a New Stated Goal in Iran. Guess the Goal.
Victory is now defined as starting a war to get back to where things were before we started the war.
Is that brilliant or what?
Please click above for details and discussion.
The 5th seasonal inflection point for stocks is July 21st. It’s a top.
Banks don’t lend deposits. So, the shift of TDs to DDs has increased AD. Since Powell destroyed deposit classifications, this is the best measure to isolate money intended for spending, from the money held as savings.
I.e., all of the increase in M2 has come from the increase in DDs since July last year.
link: Daniel L. Thornton, Vice President and Economic Adviser: Research Division, Federal Reserve Bank of St. Louis, Working Paper Series
“Monetary Policy: Why Money Matters and Interest Rates Don’t”
bit.ly/1OJ9jhU
“Today “monetary policy” should be more aptly named “interest rate policy” because policymakers pay virtually no attention to money.”
The money supply can never be properly managed by any attempt to control the cost of credit.
Mish, suddenly out of nowhere, this Blog algo pops up a comment: “TOO SHORT.”
Short and sweet comments should be allowed.
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“However, the core numbers the Fed likes to use, especially PCE remain stubbornly high.”
That is our signal, Mish, that the Fed needs to strip out anything that measures Price Inflation and then only add components that achieve their Goal of 2% – – which is of course in itself CRIMINALLY INSANE.
i suspect the strategy is to report higher numbers over the summer when everyone is in vacation mode so they can report “improving” numbers in the run up to the election
the long term trend is unmistakable but the monthly gyrations are not believable
but we will find out the real story when the numbers are less manipulated after the midterms
Raising rates is a humanitarian action. Putting ignorant Bozo Americanas further in debt with attractive rates is an act of aggression and self-interest. Our shark like owners see everything as in the now, never considering the impact of long term debt on the fools who purchase crap and all you can eat buffets on cheap credit..
Mish
You forgot Warsh”s plan to use a “trimmed” mean PCE estimate similar to what Dallas Fed’s Trimmed Mean PCE Inflation rate now reading 2.4 percent for th last 12 months ending May 2026. There–solved that. No need to raise rates now….LOL
My point in a better, and more intelligent, comment.
With our money losing value at nearly a 4% rate (by even the government’s massaged undercount), it is absolutely reasonable to raise the interest rate. (To wit, diminish the money “printing”–they’ve created 182 billion $ since Dec., amplified by the banking system.) But I don’t think they have the courage to do it.
Treasury Two-Year Yields Rise to Highest Since 2025 as Oil Jumps
It is really not up to the Fed.
Let’s hope so! I want more interest on my cash. Savers should be rewarded
When real inflation runs higher than the nominal yield on your cash—you are losing your purchasing power…Cash is the worst affected.
But it is the safest method available plus I can buy food or ammo with the cash while your stocks get you nothing.
Oh Trump and his gullible cult.
https://www.barchart.com/futures/european/energies
Get ready for high fuel prices again suckers and losers.
Do worry, Trump, Walrus and the GOP will find a way to make things even worse.™
A lot of stations here in NJ are over 4 already.
Come to CA, We are in the $5-$6 range. No bigge for us!
If you can’t handle the small additional cost of gas in NJ, then do I what I did and move to CA. Also try giving up take out food, expensive coffee and grocery delivery.
Iran keeping the Strait closed and dwindling oil reserves will not help matters. The closing of Hormuz affects no only oil prices but also NLG, fertilizers and aluminum.
Trump’s greatest enemy is himself. I fear the day when we get a demagogue populist leader who is actually methodical, calculative and pragmatic.
Fearing “a day when we get a demagogue populist leader” – why wait. Trump is allready a demagogue populist leader – just without some of your niceties. Still, he’s calculative as he’s as transactional of behavior as it gets.
We’ve got enough to fear with Trump now. I’d suspect he doesn’t have somme of your niceties only b/e he’s ti stupid to use those traits.
Speakin gof why wait – we’ve never had this level of grifting and corruption in 250 years!!
The Strait is NOT CLOSED!
“There was almost no visible traffic in the strait on Sunday, with only two oil products tankers seen approaching the waterway.”
Hormuz Route Open Despite Iran Declaration, Maritime Group Says
Which means it wasn’t closed!
If the strait isn’t closed then why is Rubio’s goal to open it?
trump refused to answer a similar question
Those questions are far too challenging to answer for Trump, his admin, and his MAGA supporters
Was that Rubio’s EXACT quote? I don’t believe so. I think it was something to the effect of KEEPING it open.
regardless, the Iranian Regime doesn’t have the capability to close the Strait. They don’t have the military power.
What they are doing is the equivalent of me declaring that no cars may pass in front of my house. But when cars ignore my pronouncement and ride by anyways, I throw rocks at them. This causes one or more cars to stop and give me a beating!
Which is what is happening to the Iranian Regime now, only it is the US military administering the beating.
Wonder what the Centcom transit fee is? LOL
Some inane statement like “costs will be 20% of all goods transported, for the costs of ensuring their safe passage” which we know means nothing but will buy time til Trump’s next lie.
Why trust what your biased and ego-bound administration says when there is third party data available? Why are insurance rates for transiting SOH 33x normal right now?
https://hormuzstraitmonitor.com
Because insurance brokers don’t want to accept ANY risk at all.
Insurance is a business where the goal is to rake in the $$$ and never have to pay anything out.