May 14, 2018

Even the Official, Heavily Massaged Inflation Measure is Now at 2.5%

This is getting downright silly.

If you want any evidence that the Powers That Be are doing everything they can to mask the real rate of inflation, you don’t need to look any further than the CPI data released on Thursday.

While energy, housing, healthcare, and numerous other prices are exploding higher, the Bureau of Labor Statistics (BLS) somehow managed to claim that inflation only rose a measly 0.2% in April.

They were able to do this because used car prices and airfares dropped. Yes, those two issues somehow eclipsed the rise in healthcare expenses, energy prices, housing prices, and even food prices.

Regardless in spite of this gimmickry, the BLS was still forced to admit that even the official inflation measure (the CPI) is now clocking in over the Fed’s target of 2% (it's at 2.5%).

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It now joins two of the Fed's own in-house inflation metrics as revealing that the inflation genie is out of the bottle.

The NY Fed’s UIG inflation metric shows inflation to be 3.1%

The Atlanta Fed’s Sticky Inflation metric shows inflation to be 2.5%

Put simply: inflation is here.

Best Regards.

Deo Talaverano.

Chief Market Strategist DHF.

George Town. Cayman Islands.