Despite expectations of inflation tapering, the Federal Reserve’s favored inflation gauge surpasses 8%, highlighting ongoing economic strains. March’s Consumer Price Index (CPI) records a significant uptick at 3.5%, the highest since September 2023, with Core CPI outperforming forecasts for four consecutive months at 3.8%. Amidst this backdrop, concerns loom over the sustainability of rising power bills and the widening gap between residential electricity inflation and broader consumer price indices. As treasury issuance reaches unprecedented levels reminiscent of the deepest Covid lockdowns, calls for cautious monetary policy measures intensify, underscoring the importance of prudence in navigating uncertain economic terrain.
Yields up
10 year breaks 4.60%
— QE Infinity (@StealthQE4) April 15, 2024
Meanwhile, the Fed's preferred inflation metric spiked to above 8%
March CPI is at 3.5%, the highest since September 2023.
Core CPI is 3.8%, beating expectations for four months.
The 3-month annualized core CPI is 4.5%.
Inflation has not gone awayt.co/TnkRsXCU5y
— Global Markets Investor (@GlobalMktObserv) April 15, 2024
Power bills will keep rising even after the Fed tames inflation, per Bloomberg.
Nationwide, residential electricity inflation is outpacing the wider consumer price index. Prices were up 3.6% in February from a year earlier, per Bloomberg.
— unusual_whales (@unusual_whales) April 15, 2024
“I think the wisdom is to wait and see and don’t rush to cut,” says Former Fed Vice Chair Roger Ferguson. “They certainly don’t want to make the mistake of starting a cutting regime only to have to reverse that later.” pic.twitter.com/QFqMzF1TVq
— Win Smart, CFA (@WinfieldSmart) April 15, 2024
BREAKING: The 10-year note yield is officially back above 4.60% for the first time since November 2023.
This comes as FOUR rate cuts have been priced-out since January and CPI inflation is up for 2 straight months.
Most recently, Goldman Sachs was the latest bank to note that… pic.twitter.com/csx4QpCQ6N
— The Kobeissi Letter (@KobeissiLetter) April 15, 2024
FEELING THE SQUEEZE: Bidenflation Soars To 18.8%, Squeezing Americans.
Despite a decrease from the highs of mid-2022, many families continue to face significant inflationary pressures. Prices have increased by 18.8%, while real wages have declined by 2.5%. Average hourly earnings for all employees dropped 2.5% to $11.11 in March 2024 from $11.39 in January 2021 when Biden assumed office. According to Mark Zandi, the chief economist at Moody’s Analytics, the typical U.S. household now requires $1,069 more each month (equivalent to $12,828 annually) compared to three years ago, $784 more per month compared to two years ago, and an additional $227 per month compared to last year. The Allianz Life study found 67% are more concerned about paying bills now than their financial future.
Bidenflation and the Fed’s eleven rate hikes to reduce inflation have made housing unaffordable for many people and caused displacements. According to CBRE data, the average monthly payments on a new home soared to $3,322 in the third quarter of 2023. This marks a sharp 90% increase from late 2020, when it stood at just $1,746 before Biden took office. Rising rent and the end of pandemic-era protections are contributing to the homelessness crisis.
Therefore, it is unsurprising that inflation and food prices emerged as top economic issues among Americans in a recent nationwide TIPP Poll.