Head in the Clouds

A very strange reaction to another strong CPI report. Let’s look. I continue to think the Fed’s head is in the clouds here with respect to their understanding, or negligence, to inflationary risks.

This is monthly core CPI. The anomaly is the summer weakness period. 0.3 is the normal, and we are settling to a 3.6% trend inflation rate. It is sticky and underneath the hood, it looks worse than this.