Inflation Report Means No Fed Move?

June 14, 2023

by Karl Denninger Market-Ticker.org

Why not? Right here:

[…] Ex-food and energy inflation has barely budged and still sits well beyond 2x the Fed’s target.

Worse, if you look inside the report multiple essential service items are still raging. Rent of primary residence, for one, is up 8.7% over the last 12 months and shows no downward bend at all, being up about a half-percent monthly. Neither is food away from home which is very likely to start biting hard in the lower end of the wage spectrum. I’ve already seen the shift to J-1s in a couple of places and its jarring when you see it after not being there for a bit; the problem is that all the locals who used to work there can’t earn a living at it anymore — so what are they doing to earn an income now? Medical commodities are in fact increasing their price acceleration, now running at about 9% a year or four times plus the Fed’s target. And both vehicle repairs and insurance are in double digits; the latter running about 17% annualized and accelerating; the last four months annualizes out to roughly 20%.