The Fed’s preferred measure of inflation is up for April at 0.4 percent (annualized at 4.7%) despite 500% increase in the Fed funds rate so it would seem more rate hikes are in order.
The personal consumption expenditures price index, which measures a variety of goods and services and adjusts for changes in consumer behavior, rose 0.4% for the month excluding food and energy costs, higher than the 0.3% Dow Jones estimate.
On an annual basis, the gauge increased 4.7%, 0.1 percentage point higher than expected, the Commerce Department reported.
And although inflation is a huge problem for everyone that isn’t the biggest pending disaster. The debt ceiling crisis looks like it may have a solution today which means that the US Treasury will issue nearly a trillion dollars in bonds which will likely create a huge sucking sound from bank deposits and equities into bonds as the rates are likely to be over 5 percent.
Source: CNBC.com
Additionally, higher rates will likely push the US dollar even higher crushing earnings for many American firms doing business overseas. Ultimately, we expect this to bode well for our January 2024 put positions and give us some nice profits but the only way to find out is to stay tuned, stay profitable and stay solvent…
[…] the heels of 4.7% core personal consumption expenditures, the Fed’s preferred inflation measure, we now have the BLS releasing the April Job Opening […]