How’s the Fed doing? The Atlanta Fed inflation dashboard has the answer.
For an entire year the Fed has been above its 2.0 percent inflation target in nine of nine inflation measures.
September 2025 Results
- Core CPI: 1.0 percentage points high
- FRB Cleveland Median CPI: 1.5 percentage points high
- FRB Cleveland 16% Trimmed-Mean CPI: 1.2 percentage points high
- Atlanta Fed Sticky CPI: 1.3 percentage points high
- Core PCE: 0.9 percentage points high
- Market-Based Core PCE: 0.6 percentage points high
- FRB Dallas Trimmed-Mean PCE: 0.8 percentage points high
- FRB San Francisco Cyclical Core PCE Inflation: 1.8 percentage points high
- Cyclically Sensitive Inflation: 1.0 percentage points high
Some of those are very easy measures. For example, the Dallas Trimmed-Mean PCE throws away (trims) a huge number of items on both the top and bottom end, but vastly more on the top end.
Then based on about half the total data calculates inflation. The result was still 0.8 percentage points over.
Alleged “market based” measures brutally skew rent data by looking at new leases despite the fact that new leases are only 10 percent of the market.
Existing lease renewals are far more sticky. People don’t like to move. New leases are falling in some places and the “market based” measures pick this up.
Trimmed Mean Inflation Is the Ultimate Absurdity in Inflation Measures
On January 4, 2022, I commented Trimmed Mean Inflation Is the Ultimate Absurdity in Inflation Measures
At the time, the year-over-year CPI was 6.8 percent, the PCE was 5.7 percent, and the Trimmed-Mean was 2.8 percent.
The Dallas Fed discarded items with a combined weight of 24.07 percent off the bottom but 32.50 percent off the top end.
Ultimately, the Dallas Fed discarded 56.57 percent of the entire PCE, heavily weighted by discarding high inflation items to arrive at a preposterous 2.8 percent year-over-year measure of inflation.
I tossed the model as totally ridiculous at that point, and have not looked at it since.
Yet, even by this nonsensical measure, the Fed is 0.8 percentage points high in 2025. I did not look to see what the Fed trimmed this time.
Market Giddy Over Tame CPI for September, But Was It Really Tame?
Earlier today I commented Market Giddy Over Tame CPI for September, But Was It Really Tame?
Tame September CPI? How Tame?
CPI and PCE Year-Over-Year Details
- CPI: 3.0 percent
- Core CPI: 3.0 percent
- PCE (August): 2.9 percent
- Core PEC (August): 2.9 percent
The actual results are much worse because of very poor CPI measures.
Please click on the above link for details and discussion.
It seems inflation is only bad for the market when there’s a fed willing to raise rates to fight it like Volker did. This rally has been referred to as the ‘debasement rally’ since the fed ignores real inflation and lowers rates.
landlord lowered the rent for my adult child in a very safe and nice hood overlooking a great park. solid house near great shopping.
I agree with everything you said, Mish, & fantastic table of data. I just think the Fed is not talking about its unspoken 3rd mandate:
Keep interest expense within a reasonable level, given the mountain of debt that is growing rapidly.
More rate cuts fix this.
/s
9 out of 9 is generally considered a pretty good record. Were they trying to do this??? Is this a feature of our economy, or a glitch???
– For an entire year the Fed has been above its 2.0 percent inflation target in nine of nine inflation measures.
> Should there even be a target, because the rates will fall to where they belong, if you let the Market Decide, and it will, so no guessing is required, and certainly no mandated, made up and highly potentially meaningless number.
>> I am sure many would say it’s right where it should be, but with interference, or in other words, not being allowed to settle into its proper %, as the phony mandate, with a market that’s different, and then Politicians asking WHY? Like they don’t know, it’s because of them and their interference to try and force it their way. You can’t make the Market what You want, because it’s what The Market Wants and Will Have!!! Using Real Numbers will yield Real Results and nothing more or less.
Health insurance will eat the economy…you think it is only a matter to be borne by the poor’s….it’s gonna show up in all the prices
…Premiums for employer-provided health insurance spiked by more than double the rate of inflation this year, driving the cost of a family plan to almost $27,000, a new survey finds.
KFF’s annual survey of more than 1,800 small and large employers found family premiums grew 6% in 2025, compared with a 7% increase in each of the previous two years. That’s compared with general inflation of 2.7% and wage growth of 4% over the past year…
While KFF’s report doesn’t provide insight into 2026 costs, other large surveys have cited premium hikes of 9%. Newly released individual and small-group market premiums that show steep increases don’t bode well for large-group employer plans, either…
And don’t forget, when people drop off Medicaid, they then show up at hospitals sicker than before, the hospitals must provide care by law, the cost of that care is buried in the bills of those with insurance, pushing those bills up, ultimately again raising the price of insurance for companies and employees
It’s a death spiral
Kind of same with auto and home ins.
I am happy to see people finally starting to use their brains around here. Take $27,000 and multiply x 10 years = -$270,000. And for what? To pay for the privilege of having an insurance company question all of your medical teams decision to treat you. Lol, only in a broken America.
Now move overseas and eliminate $25,000 of useless spend and invest it returning 10% per year and you have $400,000 in profits.
Now do the same for property taxes, other insurance, and taxation and its easy to see how I’ll have many millions more over the next decade by leaving.
But if you think things are bad now, wait till 2030 when 80 million people need hip replacement, stents, and all the other stuff the elderly need. Who do you think will be paying for that all? Not boomers on social security and medicare, that’s for certain.
That begs the question, got exit strategy?
true. amerikan system for doctoring is pure grifting. the doctors, the insurance companies, the accountants………..all grifters here. as are the people. democracy works perfectly. hat tip to republic by plato thousands of years ago.
Fourth Turning
None of these measures have any substantial correspondence with the actual inflation experienced in the real world by millions.
So again, they do not even measure, let alone control, a major mandate of the so called Federal reserve.
I sure hope they don’t cut rates anytime soon. Stop spending more than you take in too. Parasite state.
Hope they don’t cut rates? LOL, we are entering a faster phase of the great wealth transfer. Pucker that starfish, this going to hurt the poorest 95% a lot and the richest 5% such that much more cash from the rest of us forever. That’s how this works, with the help of conservative voters who are all too willing to vote against their self-interest to help big businesses make ever more profits.
“None of these measures have any substantial correspondence with the actual inflation experienced in the real world by millions”
Exactly – They Are Worried About ‘Inflation’ – After Everything Has Doubled & Tripled.!
No SNAP: no problems. Gavin will rule 50 million. Hochul: 30 million and Pritzker will get 5 more million poor and elderly voters. Trump needs a correction. Without one he will not get his 3%.
They’ll just have to peacefully starve with their kids.
Mish, you should write an extended piece, “dumbed down” or those out here who have never considered the BULLSHIT of the CPI. I recall, over 30 years ago (not sure) when I found out the FOOD and FUEL price inflation were trimmed out.
I think that a book could be written, and I am not smart enough.. and too old to want to do it…but, it would be a GREAT title for a book:
“THE ART OF DECEPTION: Government Bull.”
I know that you could write a good BUT one-minute manager style and keep it economically written.
I am personally, right now, writing a book on HOW to negotiate. It will be a limited distribution when it is done and I will let you know, personally, MISH when I have finished it.
My first two chapters are done. I cover “TACO” as a reference point because TACO is the sign of a weak position in any negotiation that Trump is involved in. Right now, RARE EARTHS is a huge (“YUGE”) example of America being a the Mercy of China.
The rare earth are hostages held by a terrorist state. They are the best card against the US. They will lead to China econ destruction. China is already in recession. Thirty
two generals were sacked last week. Under the 4th plenum tranquility, volatility is rising. Tariffs increased centrifugal forces that might break China apart. Xi lost his Iron Grip. The show of unity: puppets bs.
In 1995 Core CPI was created to exclude those items. CPI still includes them.
The only way to sell T-bombs is give the illusion of tame prices and inflation. Figures lie, and liars figure. Now just steepen the yield curve immensely and get banks and levered players jumping on the growing spread. Rates don’t matter to them, its the spreads that do. If the 1.5% 10 year not all that long ago doesn’t tell you it works, nothing will. Financial Repression and how Fractional Banking works.
You (banks) buy our bonds, we will backstop you in principal via Reverse Repos and you lever 10-1. Start making 200-300 bps spreads, a heck of a lot of longer duration bonds will get bought. Lever that 10 to 1 is 20-30% return and the taxpayer backs you. Gov’t can run massive deficits this way. But you need to make sure you fluff inflation numbers, easy fix……Like Adjusted EBITDA and other groovy financial formulas.
OT: RAND suggests less aggression towards China? (Or is this a deception, since they know foreign govies know by now to read think tank docs and mostly ignore the figureheads?)
https://simplicius76.substack.com/p/rand-urges-for-major-chinese-re-think
Anyone that keeps bashing China here should watch this video and see how far advanced China has become in so many areas.
https://www.youtube.com/watch?v=8CD0LKkoMzE
Driverless trains and cars, drone delivery, robots everywhere, etc.
Watch the video and ask yourself where you see any of this anywhere in America.
Things they’re doing that appeal to me personally for quality of life revolve around food, housing, and medical care
– aquaculture at scale
– automating the production of housing
– foldable or adjustable furniture (sometimes electromechanical) that folds away for storage or adjusts for different purposes, so you can live more comfortably with the existing space you have
– dirt-cheap, high-tech, beautiful, efficient hospitals where you can schedule multiple tests in a single day starting with no appointments
I’ve seen videos of these things but didn’t save the links.
Personally, except for self-driving features, I’m not a big enthusiast for more tech in cars or for “greeting / concierge” robots. But when it’s dirt cheap, I guess I don’t mind. 😉
Un-investable
https://kdwalmsley.substack.com/p/top-venture-capitalists-tour-china
One of the amazing things I noticed is there is almost no trash on the streets or sidewalks, one candy wrapper was seen. China spends about one third to one half the amount on defense compared to the US.
Really America’s future is completely F-cked compared to China.
Thanks for sharing!
I have a 17 yr old bike i keep at work to get a bit of exercise every day. Figured i would make it a project to fix it up for safety sake. Low end wheel sets have got so expensive. Think of trying the ones from china on Amazon.
Check out “Samebike” ebike or other brands on Alibaba.
Look for listings from certified sellers with shipping prices already calculated for your address. (Create an account, of course.). Otherwise, you have to waste time chatting with sellers who maybe don’t stock the item and then want an arm and a leg for shipping.
Banggood.com is another decent website. They curate a much tighter list of items. Might save you some time, compared to Alibaba.
I have met a couple of frighteningly intelligent Chinese engineers, and they weren’t even super high level.
Simplistic garbage economic theory used to create simplistic garbage economic models fed with insufficiently granular, defective data through manipulation for political reasons (ex., CPI) or defective collection methods. This is allowed to continue because it benefits those in a powerful enough position to change it: it allows politicians to spend more than is collected in taxes because “deficits don’t matter” and results in the boom/bust cycles which transfer wealth upward.
Minsky Introduction Video (2:48)
https://www.youtube.com/watch?v=jIP7ES1lCGk
GDP bs: We import less and export more SPX, QQQ, US3M, US 10Y and US 30Y. Gravity with the world keeps TNX down. Inflation: bs. When QQQ falls TLT rises. The world trust our cheap dollars. It’s a bargain. China, EuroArabia, Japan, the UK and Turkey to the back of the line. The US added debt, but it’s in the General account war chest. The US gov might not spend it on SNAP.
USDA Announces No SNAP Benefits for November Due to Government Shutdown
The U.S. Department of Agriculture has confirmed that SNAP benefits will not be distributed for the month of November, as the government shutdown continues into its 23rd day.
Do you think that SNAP will be the breaking point? We shall see. Trump is negotiating with a very stubborn Democratic side but who CONTROLS the deals? WHO IS IN THE UPPER HAND position?
That will come out in the end. The bullshit will stop and they deals will be done.
We are three days without food for a major uprising….9 meals in a row. Boom!
– Trump is negotiating with a very stubborn Democratic side.
> It’s a net negative to be unrealistic in demands when negotiating.
– who CONTROLS the deals?
> The side voting to open up the Government
– WHO IS IN THE UPPER HAND position?
> The side voting to open up the Government
>> The issues are:
1. Closed Government. Answer: Open Government
2. No Other Issues, Just Demands
All Control is with the Problem Solvers ie. 100% to Open The Government.
Only Issue: A Closed Government
I would say the dems are in the drivers seat. Since if the rep could do it without them they would already have.
Seems to me if you want money in the budget for anything the time is now when you are discussing spending.
Food Inflation: The Price Spikes of Beef, Coffee, Eggs, and Dairy
https://wolfstreet.com/2025/10/24/food-inflation-the-price-spikes-of-beef-coffee-eggs-and-dairy/
These post of prices are all the same. They never take into account anything but the numbers on the product name and by a determined area.
I have never found it difficult to get affordable good or decent coffee, ever!
I have never found it difficult to get affordable Eggs, ever!
I have never found it difficult to get affordable Ground Beef, ever!
I find most of this hype, as a certain % of people will buy into this crap!
Rent CPI = OER northeast + OER midwest + OER south and OER west + Rent of primary resident. It’s inelastic. It’s a distortion. It may compensate for the lack of data about: property taxes, mortgage, fees, maintenance, improvements, utility, security…If a rental property is vacant or partly vacant (Airbnb, higher vacancy turnover) owners still have to pay all the above expenses.
Anyone else sick of being scammed by government statistics?
EXACTLY. There are lies there are damn lies and then there are statistics. These numbers are deliberately manipulated by the economic politburo to underrepresent inflation. The media is useless in pointing this out. The standard of living of the middle class will continue to decline until the sheep wake up. We need torches and pitches forks daily in DC until the parasites are out and a new beginning with altruistic uncorrupted politicians right the ship. All part of th fourth turning.
I realized long ago that the MSM is not representing the “PRESS” concept. “PRESS” meant that hard questions are asked OVER AND OVER AGAIN.
Now, these fucking Presidents simply bar them from entering the White House Press Room.
WHAM: solved!
Thank you. YES! They even use this bullshit to determine the Annual Soc Sec hikes which are as LOW as they THINK that they can get away with.
Now, of course, Seniors are not in “upper hand” positions and have no authority and the AARP is simply in the insurance Business.
The AARP has lied about their deals for seniors for years. I hate those lying MOFO’s. The AARP has no sway ANYWHERE where it matters on behalf of the richest sectors of our Culture (BOOMERS).
We have NO sway because we want to travel and enjoy and NOT be dumbed down by Politics and so on.
I am at an age where I could give a shit about anything other than just having a good time and they are fucking with that now, too.
Time for a new revolution? Maybe a government “Of the people, By the people and For the people”. No oligarchs, no billionaires, no “special” persons.
Like I said on numerous occasions we have the best government money can buy. The only way to reverse is to elect candidates who will institute laws or a constitutional change that forbids private donations it makes the government Finance all campaigns equally. Also limit them to one longer term. Fix the f***** up fed Reserve it Institute a constitutional convention mandating a balanced budget
– Time for a new revolution? Maybe a government “Of the people, By the people and For the people”.
> This was a Government voted in by The Majority OF The People, BY The People and For The People.
>> Elections Win Via The Majority, so hence all that is done is for the Majority Who Voted For It. This is the Constitution at work For The People in fair elections, with the winner The People (Majority). Nothing to fix here, just different people who will have a chance Next Election. In the mean time, go along with the people and try to be happy until it changes for you perhaps…
No it wasn’t, more citizens didn’t vote than did! Try to be happy, are you nuts? Our elections are of the corporations, by the corporations and for the corporations. China is kicking our collective ass and the President is mentally ill. And you say “don’t worry, be happy”?
The CPI has been above the Fed’s 2% target every month since March 2021. 55 months in a row of misses! With an aim like that, what is the point of a target?
Having failed to diminish inflation, the Fed has resumed creating more money. Emblematic of the kind of world we live in. The market’s reaction is of a piece with that strained logic.
Brutus. Et tu?
Look, they KNOW that WE know and they KNOW that we have NO POWER. Voting is simply an act of pretending that we have sway.
It matters NOT who is President (which side)…this part of our lives is independent and Trump has even learned who has the UPPER HAND.
In a sense, the voter is trading the illusion of influence for his tacit endorsement of the subsequent loss of freedom…things like the Patriot act that follow most elections. The “pretending that we have sway” creates a sort of buy-in by us, the victims.
(I admire the “AntiFederalist” writer Brutus in particular. He no doubt took his pen name from the Brutus who killed the tyrant Caesar, but it is hard to know enough about that episode 2000 years ago to admire the ancient instance.)
Lowering interest rates will fi these problems! We are now living in the Superman comic book Bizarro world where everything is reversed.
One can only imagine what the fed will do when taco and his crew take over. Gold prices will sky rocket and the dollar will sink.
“Broken Hearts are for Assholes”. F.Z.
MSM financial press today:
“Good news. Beef and Coffee are up 15 to 20%, but economists expected them to increase by over 25%, so this is a really good report and gives the Fed the go-ahead to lower interest rates”
Who is benefits from inflation? Fixed rate debtors. If debtors have maxed out their credit (ability to repay debt), they can’t refinance when rates head lower, so inflation is the next best option to fit that loan payment s into a budget. The FED’s behavior supports repayment through inflation because the FED knows that lowering interest rates will create inflation, and yet they did not hold or raise rates to push inflation down.
Fixed-rate debtors only benefit if their own income grows with inflation, though. Otherwise, they go bankrupt.
The creation of the Federal Reserve in 1913 was, and continues to be this countries WORST/BIGGEST mistake in our history! Nothing else comes even close to second place!
Yes, but the Eurodollar/Petrodollar systems were ingenious/nefarious ways to buy a very long lease on life for that corrupt system. Reckless spending with much less consequence than the “normal” money printer math would dictate. The only question is how much longer those two friends will keep delivering for us. For right now, things seem mostly fine.
Countries worldwide were gearing up for titanic fights. The welfare state and a unified banking system were necessities, to form, arm and feed the teams involved. It was a series of fights for planetary dominance. We survived both fights and came out on top for at least 70 years, while hundreds of millions lived prosperous consumer lives. And now, we are here. It is not 1913, and it cannot be that again. Winding a clock backward does not reverse time. Try putting a genie back in the bottle which is hundreds of millions of dependents in the USA alone, three meals or a few medical procedures from chaos. No central bank means the old chains of bank failures, but in a highly privately armed and mentally sketchy place, with fresh memories of having everyday prosperity. Imagine trying to make it to and through a mini-mall for simple food or a gas station: road warrior time. A phone app with gold or BTC ETF in one hand, an AK47 ready for use in the other hand. How to carry a bag of groceries? That’s what an inelastic currency will do now. So we are between a devil and a deep blue sea. I will take the path we are on (though the fools tinkering with it may lose it): better an over-medicated and halfway sick patient, stumbling around, than one raging in full cardiac and pulmonary arrest (assuming those are the choices).
FDR manipulating the US into WWII and the CIA murdering JFK (thereby installing LBJ) are close seconds.
Guess that depends on what qualifies for inclusion. Financial issues only or moral issues too, like rearming Germany, genociding Americans, or centuries of slavery (so different from slavery elsewhere that it deserves a different name)?