The Thief In The Night Is Back with a Vengeance

3 Month Annualized Inflation up from 3.3% to 4%

As Zerohedge put it: “The 3-month annualized rate ticked up to 4% from 3.3%. The 6-month annualized rate was 3.7% (vs 3.2%). Not pretty.”

People tend to focus on the 12 month headline CPI, which printed at 3.1% overshooting expectations of 2.9% by 0.2%; However, the upward trend during the last 3 months ended January 2024 creates greater concern going forward.  

The increase likely arises due to extraordinary government spending and stealth bank bailouts.

A further concern is the government’s tendency to bias its estimation of inflation downward.  If the government admits inflation is back at 4% over the last 3 months ended January, then ordinary Americans likely felt a substantially larger impact.

Additionally, rising inflation provides evidence that the Fed is not through the woods whatsoever, and going on an interest rate cutting path now would be treacherous for ordinary Americans as inflation would pick up and potentially get out of control, so expect the Fed to pull back from planned cuts of the federal funds rate.

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