February 15, 2018

The Fed's "In-House" Inflation Measures Are Already 3% and 3.7%

If you’re looking for signs of inflation the CPI will never show it.


Because CPI is constructed on purpose to understate inflation.

The Fed knows the CPI is garbage, which is why it (the Fed) has multiple other inflation measures. And by the way, ALL of them show inflation is already OVER 3%.

The NY Fed’s Underlying inflation gauge or UIG hit 3% in January, while the Cleveland Fed’s “Sticky Inflation” measure rose 3.7% in January.

This is a HUGE deal for the financial system.


US Treasury yields trade based on inflation (among other things).

When inflation rises, Treasury yields rise to accommodate for this.

When Treasury yields rise, Treasury prices FALL.

When Treasury prices FALL, the Everything Bubble begins to burst.

Well guess what? Treasury yields are SOARING having broken a 20 year downtrend.


Put simply, this chart is telling us BIG inflation is on the way. It no longer matters what the Fed claims about CPI, the BOND MARKET has already made up its mind.

This is the BIG money trend for 2018.

Best Regards.

Deo Talaverano.

Chief Market Strategist DHF.

George Town. Cayman Islands.