Most of the inflation data is in except Japan which is usually consistent at three percent so we updated our top trading partner inflation charts sans Japan inflation.
As you can see from the chart above, inflation with the US top ten trading partners is still climbing and while people in the United States have been breaking out the champagne and celebrating the end of inflation, we don’t see it that way.
The inflation outlook is a bit better for China, Mexico and Canada although China is in relative lock down, Canada inflation is flat and Mexico has a central bank rate of 10% as of today.
The Fed meets in mid-December and plans on hiking again and that will drive the cost of borrowing way higher and quite frankly it seems to be needed given the fact that inflation among the US top trading partners is still climbing.
Our primary investment focus at the moment has been to ladder T-bills and we will continue to do so as we expect 2023 to be a brutal year for equities. Let’s see what happens with inflation next month but in the meantime stay tuned and stay solvent…