Inflation Is Winning, The Fed Is Losing

[Michael Carbonare]

𝐈 𝐩𝐚𝐢𝐝 $𝟔 𝐟𝐨𝐫 𝐚 𝐜𝐚𝐧 𝐨𝐟 𝐭𝐨𝐦𝐚𝐭𝐨𝐞𝐬. $𝟕 𝐟𝐨𝐫 𝐚 𝐛𝐨𝐱 𝐨𝐟 𝐜𝐞𝐫𝐞𝐚𝐥.

The Producer Price Index spiked 1.38% in April. That's 17.8% annualized, worst since March 2022.  This is what companies are paying each other.  And this is what is ultimately passed to consumers.

The Fed started this fight and is now being counted out. . .7. . .8. . .9. . .
The Fed can't cut rates without pouring gasoline on inflation.  They can't hike without crushing an already stressed economy.  They're boxed in.  Meanwhile, consumer's purchasing power erodes a little more every week.

When the government "fixes" the problem, the inevitable result is FUBAR.

This isn't a temporary spike. Services inflation, the stickiest kind, just hit 5.5% year-over-year.  Worst since November 2022.  That doesn't come back down quickly.

The inflation you're feeling at the grocery store today?  That's last month's PPI working through the system.  April's numbers haven't even hit the shelves yet.

Buckle up.

[Mike Dymski]

The government is the problem...money printing and deficits are inflation.  Innovation and efficiency drive prices down and the government spends it all plus a lot more.  Officials want to get re-elected and austerity is unpopular.  Asset owners are fine and non-asset owners are not.  The economic divide is increasing and many people are angry.