Is inflation in the US reaccelerating?
The 3-month annualized core PPI inflation rose to 5.0% in June, its highest since 2022. This metric has more than DOUBLED in just 6 months. This is also higher than in any period over the last 15 years, except for 2021 and 2022. Something to watch closely. Source: The Kobeissi Letter, Bloomberg
German inflation unexpectedly accelerated in July to 2.3% YoY from 2.2% in June as food price inflation keeps rising, core inflation, and services inflation remain sticky at 2.9% and 3.9%.
Source: HolgerZ, Bloomberg
In the US, if your income and net wealth has not increased by 25% since 2020 you are poorer now than four years ago...
Source: Michel A.Arouet
Easing US inflation in June👏
✅Headline PCE prices: 0.1% m/m ✅Core PCE prices: +0.2% m/m 🎯Moving toward Fed's 2% target: ⤵️Headline inflation -0.1pt to 2.5% yoy, IN-LINE with expectations. This is the lowest level since February '21 and down from 7.2% two years ago... ↔️Core inflation is flat at 2.6% yoy, at the lowest level since March '21. This is slightly above expectations (2.5%), which is not such a big surprise as PCE data from yesterday's GDP report revealed a similar picture. Source: Gregory Daco, BEA, EY-Parthenon
Adjusting for inflation, the Japanese Yen is at its weakest point in 57 years 🚨
Source: Barchart, Bloomberg
Interesting point of view by BofA:
"Fewer investors have focused on the inflationary effects of higher income. No other Fed hiking cycle in history occurred while government debt was so large ... interest payments flow to holders of Treasury securities and some portion will be spent." Source: BofA, Octavian Adrian Tanase
Historically, bonds acted as efficient portfolio hedges only when inflation is <2%.
Below is the rolling 24-month correlation between US stocks and Treasury bonds. Source: Mike Zaccardi
US supercore CPI is negative MoM for the 2nd month in a row
zerohedge.com, Bloomberg
