![\"\"](\"http:\/\/stateofthenation.co\/wp-content\/uploads\/2023\/12\/photo-1554768803-2ae381da5645-1024x436.jpg\")
Photo by Jp Valery<\/a>\u00a0on\u00a0Unsplash<\/a><\/h5>\n<\/div>\n<\/figure>\n<\/div>\nHow they love to spin it.\u00a0Drudge<\/em>\u00a0wrote the headline for today\u2019s CPI report as follows: \u201cInflation\u00a0<\/strong>cools<\/strong><\/em>\u00a0slightly.<\/strong>\u201d Lie. It heated up. Plain and simple.<\/p>\nMarketWatch<\/em>\u00a0started with a more honest headline but then spun it as follows to force it as positive as they could: \u201cStronger-than-expected services inflation [the honest part]\u00a0<\/strong>won\u2019t spur Fed rate hike<\/strong><\/em>, says BlackRock\u2019s Gargi Chaudhuri.\u201d Read the article, however, and you find it says, \u201cwe do not believe the Fed will prematurely\u00a0<\/strong>cut<\/strong><\/em>\u00a0interest rates in 2024<\/strong>\u00a0while inflation remains above target.\u201d So, the actual effect of today\u2019s CPI report was a bit more than just \u201cnot spurring\u201d\u00a0another<\/em>\u00a0rate hike. It practically assures the Fed will not even consider cutting rates in 2024 as the market universally believes the Fed will do.<\/p>\nThe headline downplays the impact because no one in today\u2019s market believes the Fed will hike rates in 2024, so it\u2019s easy to say the Fed won\u2019t do that, thanks to this report, but everyone believes the Fed will\u00a0cut<\/em>\u00a0rates (as many as four times) in 2024. Inside, the article cannot escape revealing that\u00a0this inflation report actually presses the Fed to\u00a0<\/strong>not cut rates all the way through 2024<\/strong><\/em>,<\/strong>\u00a0which is how I retitled the article among the headlines below to help them get it right with what the article actually reveals:<\/p>\n\u201cHowever, given the stickiness in core inflation,\u00a0we do not believe the Fed will\u00a0<\/strong>prematurely<\/strong><\/em>\u00a0cut interest rates in 2024<\/strong>\u00a0while inflation remains above target,\u201d said Chaudhuri, BlackRock\u2019s head of iShares investment strategy for the Americas\u2026. Core-services inflation was \u201cslightly\u00a0elevated<\/em>\u201d after shelter prices in November were\u00a0higher than anticipated<\/em>, she said, adding that\u00a0housing inflation rose<\/em>\u00a0about 0.5% month over month.\u201d<\/p><\/blockquote>\nIn fact, once you get past the languid headline, you find the narrative is now shifting toward believing it would be \u201cpremature\u201d for the Fed to cut interest rates in 2024, even though 2024 rate cuts have been the market\u2019s broad assumption for several months as practically a given. With that shift, at least, some in the mainstream press are edging toward what has been my consistent position. The stock market, which rose today, may read beneath the algo-grabbing headlines tomorrow to see the starker truth they missed today. For today, however, the algorithms grabbed the headlines that were designed for them and bid the market aloft.<\/p>\n
Moreover,<\/p>\n
\u201cCore services ex-rent of shelter,\u201d a metric known as\u00a0\u201c<\/strong>supercore<\/strong><\/em>\u201d inflation that is closely watched by the Fed,\u00a0<\/strong>increased<\/strong><\/em>\u00a0about 0.6% on a month-over-month basis<\/strong>, according to Chaudhuri.\u00a0Other areas including medical care and transportation also saw \u201csome upward pressure<\/strong>\u201d within services in November, she said.<\/p><\/blockquote>\nAll of that is actually completely in line with what I have been expecting to see\u2014a slow upward increase in inflation, coming mostly from housing and healthcare in the sticky services sector.<\/p>\n
Still, they must spin it as positively as they possibly can:<\/p>\n
Still, \u201cservices inflation has made a lot of progress this year and was the main driver that brought core inflation from 5.4% in January to 4.0%\u201d in November<\/strong>\u00a0on a year-over-year basis<\/strong><\/em>, said Chaudhuri. Core inflation omits food and energy prices.<\/p><\/blockquote>\nYeah, well it made a lot of progress EARLIER in the year, as I have said, but it has been going up for five months now. The financial media always want to focus on year-on-year because mathematically that has to be slower to turn back upward. It\u2019s the longer-term measure. I was saying \u201cthree out of four months with the fourth being neutral\u201d went upward, and, before that, \u201cthree months\u201d went upward. You can see the trend. Inflation is going HIGHER for LONGER, stretching month after month.\u00a0Inflation<\/strong><\/em>\u00a0is going higher for longer, not just the Fed!\u00a0<\/strong>We are now just tacking more and more months onto the new slowly rising inflationary trend.<\/p>\nThat means, of course, the\u00a0Fed<\/em>\u00a0is also going to go \u201chigher for longer\u201d or, in the very least, will be holding high for longer because this is clearly the wrong direction for inflation to be flowing. Enough months of gradual rises will, as I\u2019ve been harping on (because almost no one else is saying it), cause year-on-year inflation to start rising, too. While all of these latest months have been incremental rises, inflation has clearly moved in the wrong direction for five months now! So, let\u2019s just dispense with the \u201cinflation is going down\u201d that we\u2019ve heard every month just because YoY inflation (the bigger ship that turns more slowly) has not put in its turn yet; but even that paused this month.<\/p>\nStill, the positive spinners whir away, putting all the optimism out there they can:<\/p>\n
\u201cWe continue to believe that we are in the last few miles of the Fed\u2019s marathon battle against inflation<\/strong>,\u201d she said. \u201cThe end is in sight<\/strong>, but it is still too soon to declare victory\u2026.\u00a0The next move from the Fed will be an interest rate cut in the second half of 2024 when inflation has normalized further.<\/strong>\u201d<\/p><\/blockquote>\nWow! What a spinning merry-go-round from the mainstream financial media.<\/strong>\u00a0All hype, even when the news is truly bad for inflation\u2014five months now of rising. The brief pause last month did not manage to turn the recent new three-month trend back downward, as the move shown in this month\u2019s report for November now proves. I didn\u2019t think it would. It\u2019s all baloney all the time from these guys.<\/p>\nCNBC\u2019s headline even went this far:<\/p>\n
Inflation fears down, consumer optimism up:\u00a0<\/strong>Economy may start to help Biden with voters.<\/strong><\/em><\/p><\/blockquote>\nI suppose, if voters want month after month of increasing inflation, it will help Biden out, or if the press can keep spinning rising inflation as a\u00a0success<\/em>\u00a0story enough to make the big lie come true in the minds of voters, then it should help him.<\/p>\nThe hoopla, of course, is helping markets get around the bad news, so stocks edged up today, more than happy to grab the fringe of the report and not even think about the fact that it\u2019s the fifth month of an upward trend. If consumers are feeling better, as the title claimed, it is because the press has been outright lying for almost a half a year by saying inflation was falling each month, when it was rising each\u00a0month<\/em>\u00a0but still falling year-on-year because of the earlier months when the Fed was having great success in it fight\u2014something it has not had in months now.<\/p>\nThe last jobs report also said the Fed is no longer winning, which should mean it will likely have to tighten harder. The Fed can, of course, wait a spell to see if the lag time involved eventually starts to hand Team Fed some winning months; but still having the wrong team score a goal again and again cannot be called \u201cwinning.\u201d It cannot be called \u201cinflation is falling\u201d when inflation is the team scoring each month, even if Team Inflation has not yet achieved a winning score for the whole game. What it does mean is the Fed\u2019s feet will be held to the fire longer, which means more time for more economic damage to keep building. Neither the latest jobs report of the latest inflation reports give the Fed any latitude for backing down.<\/p>\n
But consumers\u2019 growing economic\u00a0confidence<\/em>\u00a0comes on the heels of a strong jobs\u00a0report\u00a0Friday, which showed wages rising and unemployment softening, defying fears of a recession this year.<\/p><\/blockquote>\nThat\u2019s one way to look at it, but a more direct way to look at it would be \u201cRising monthly inflation for almost half a year along with rising wages and falling unemployment showed that the Fed is no longer making any progress in fighting inflation, so it will have to tighten longer, increasing the likelihood that it creates a recession as it always has during its tightening cycles.<\/strong>\u201d<\/p>\nThat wouldn\u2019t be pessimism either. That would just be truth.<\/p>\n
With such lack of transparent truth as we read today in financial media that, by all appearances, wants to pump the markets and after hearing from the Biden Admin again today, it is no wonder that \u2026<\/p>\n
The current economic mood in America is\u00a0<\/strong>unusual<\/strong><\/em>. Voters report feeling deep economic\u00a0<\/strong>pessimism<\/strong><\/em>, but statistics show they are living through an objectively strong economy.<\/p><\/blockquote>\nThe statistics lie. So does the reportage. Didn\u2019t the article headline just say they report more\u00a0<\/strong>optimism<\/strong><\/em>?<\/strong>\u00a0Maybe consumers\u00a0feel<\/em>\u00a0the reality of inflation but keep\u00a0reading<\/em>\u00a0that it is going down; hence the unusual conflict in their feelings. Their reality keeps not squaring with what they are reading. (Which is why I write\u00a0The Daily Doom<\/em>\u00a0to just call it as it is so your head doesn\u2019t spin from all the gyrations in the news.)<\/p>\nEconomists attribute record high inflation of the past few years to Biden\u2019s generous pandemic-era stimulus packages, along with supply chain disruptions and pent-up consumer demand.\u00a0Recent\u00a0polls<\/a>\u00a0have given Biden low marks on his handling of the economy,\u00a0<\/strong>sinking his approval rating<\/strong><\/em>.<\/p><\/blockquote>\nDidn\u2019t the headline also just say recent reports or surveys would boost his approval rating?<\/p>\n
Several recent surveys have found that Biden would\u00a0lose\u00a0to former president and Republican front-runner Donald Trump, in a head-to-head context.\u201d<\/p><\/blockquote>\n
Hmm. Didn\u2019t the headline say that this article is about the economy \u201chelping Biden with voters?\u201d<\/p>\n
The stock-trading algorithms grab the headlines, but\u00a0read<\/em>\u00a0the article and, when it finally gets to the topic of Biden\u2019s campaign, it says the opposite. No wonder the economic mood of Americans is \u201cconfused\u201d when they are surrounded by articles that contradict their own headlines because they are so packed with lies. It\u2019s hard to see how another month of rising MoM inflation is going to help improve Biden\u2019s relationship with voters. I thought inflation was the source of their \u201cpessimism.\u201d<\/p>\nSo, what a pile of mush.<\/p>\n
In poll after poll, consumers say they see scant evidence of Biden\u2019s achievements, only the high\u00a0price tags\u00a0for essentials like rent and food.<\/p><\/blockquote>\n
I don\u2019t see anything about today\u2019s inflation report that is going to help Biden with that. Maybe CNBC just didn\u2019t get today\u2019s inflation memo before writing the article about inflation fears. Perhaps they should have waited another hour for the actual report to come in before writing their drivel about inflation.<\/p>\n
Or look at this CNBC title:<\/p>\n
\u201cInflation slowed to a 3.1% annual rate in November<\/strong>\u201d<\/p>\nAnd then the summary comments that immediately follow:<\/p>\n
\u201cExcluding volatile food and energy prices, the\u00a0core CPI\u00a0<\/strong>increased<\/strong><\/em>\u00a00.3% on the month and 4% from a year ago<\/strong>\u2026.\u00a0The consumer price index, a closely watched inflation gauge, increased 0.1% in November, and was up 3.1% from a year ago<\/strong>, the\u00a0Labor Department reported Tuesday.\u00a0Economists surveyed by Dow Jones had been looking for no gain and a yearly rate of 3.1%….<\/strong>\u00a0While\u00a0the monthly rate indicated a\u00a0<\/strong>pickup<\/strong><\/em>\u00a0from the\u00a0<\/strong>flat<\/strong><\/em>\u00a0CPI reading in October,<\/strong>\u00a0the annual rate showed another decline after hitting 3.2% a month earlier\u2026. The Fed \u201cwill probably talk about continued disinflation being good news.\u201d<\/p>\nIn fact, however, if it hadn\u2019t been for a significant decrease in fuel costs, overall inflation (headline YoY CPI) would have been notably higher, instead of incrementally lower, but even lower energy costs could not help MoM inflation look better than last month or core inflation.<\/p>\n
Zero Hedge<\/em>\u00a0gets the headline as it should be:<\/p>\nSuperCore CPI\u00a0<\/strong>Jumps<\/strong><\/em>\u00a0Back Above 4.00%<\/strong><\/p>\nCore CPI accelerated modestly\u00a0MoM<\/strong>\u00a0(as expected), rising 0.3% (from +0.2%) with\u00a0Core CPI YoY flat at 4.0% from October…<\/strong><\/p><\/blockquote>\nSo, the decline in YoY inflation has now completely stalled (held flat), and the flat month we saw in MoM inflation in October has now resumed its new trend of rising. Everything is moving in the wrong direction for the Fed. Since the Fed pays attention to\u00a0core<\/em>\u00a0inflation, there was NOTHING here to support the market\u2019s Fed-pivot fantasy.<\/p>\nMost problematically for The Fed (and the ‘rate-cut-hypers’) is the fact that\u00a0Core CPI Services Ex-Shelter (SuperCore) rose 0.5% MoM (hot) and 4.08% YoY (back above the Maginot Line of 4%)<\/strong><\/p><\/blockquote>\nThat\u2019s what the focus in this report should be. Of course,\u00a0ZH<\/em>\u00a0has often been one of the rate-cut hypers, itself, talking about the pivot being right around the corner because it believes Powell will weasel out. Sometimes they have practically been pivot champions. (Now that inflation is clearly not going that way, however, they subtly shift sides \u2014 as I\u2019ve seen them do in the past \u2014 to pretend as if the rate-cut hypers are the\u00a0other<\/em>\u00a0guys.)<\/p>\n
MarketWatch<\/em>\u00a0started with a more honest headline but then spun it as follows to force it as positive as they could: \u201cStronger-than-expected services inflation [the honest part]\u00a0<\/strong>won\u2019t spur Fed rate hike<\/strong><\/em>, says BlackRock\u2019s Gargi Chaudhuri.\u201d Read the article, however, and you find it says, \u201cwe do not believe the Fed will prematurely\u00a0<\/strong>cut<\/strong><\/em>\u00a0interest rates in 2024<\/strong>\u00a0while inflation remains above target.\u201d So, the actual effect of today\u2019s CPI report was a bit more than just \u201cnot spurring\u201d\u00a0another<\/em>\u00a0rate hike. It practically assures the Fed will not even consider cutting rates in 2024 as the market universally believes the Fed will do.<\/p>\n The headline downplays the impact because no one in today\u2019s market believes the Fed will hike rates in 2024, so it\u2019s easy to say the Fed won\u2019t do that, thanks to this report, but everyone believes the Fed will\u00a0cut<\/em>\u00a0rates (as many as four times) in 2024. Inside, the article cannot escape revealing that\u00a0this inflation report actually presses the Fed to\u00a0<\/strong>not cut rates all the way through 2024<\/strong><\/em>,<\/strong>\u00a0which is how I retitled the article among the headlines below to help them get it right with what the article actually reveals:<\/p>\n \u201cHowever, given the stickiness in core inflation,\u00a0we do not believe the Fed will\u00a0<\/strong>prematurely<\/strong><\/em>\u00a0cut interest rates in 2024<\/strong>\u00a0while inflation remains above target,\u201d said Chaudhuri, BlackRock\u2019s head of iShares investment strategy for the Americas\u2026. Core-services inflation was \u201cslightly\u00a0elevated<\/em>\u201d after shelter prices in November were\u00a0higher than anticipated<\/em>, she said, adding that\u00a0housing inflation rose<\/em>\u00a0about 0.5% month over month.\u201d<\/p><\/blockquote>\n In fact, once you get past the languid headline, you find the narrative is now shifting toward believing it would be \u201cpremature\u201d for the Fed to cut interest rates in 2024, even though 2024 rate cuts have been the market\u2019s broad assumption for several months as practically a given. With that shift, at least, some in the mainstream press are edging toward what has been my consistent position. The stock market, which rose today, may read beneath the algo-grabbing headlines tomorrow to see the starker truth they missed today. For today, however, the algorithms grabbed the headlines that were designed for them and bid the market aloft.<\/p>\n Moreover,<\/p>\n \u201cCore services ex-rent of shelter,\u201d a metric known as\u00a0\u201c<\/strong>supercore<\/strong><\/em>\u201d inflation that is closely watched by the Fed,\u00a0<\/strong>increased<\/strong><\/em>\u00a0about 0.6% on a month-over-month basis<\/strong>, according to Chaudhuri.\u00a0Other areas including medical care and transportation also saw \u201csome upward pressure<\/strong>\u201d within services in November, she said.<\/p><\/blockquote>\n All of that is actually completely in line with what I have been expecting to see\u2014a slow upward increase in inflation, coming mostly from housing and healthcare in the sticky services sector.<\/p>\n Still, they must spin it as positively as they possibly can:<\/p>\n Still, \u201cservices inflation has made a lot of progress this year and was the main driver that brought core inflation from 5.4% in January to 4.0%\u201d in November<\/strong>\u00a0on a year-over-year basis<\/strong><\/em>, said Chaudhuri. Core inflation omits food and energy prices.<\/p><\/blockquote>\n Yeah, well it made a lot of progress EARLIER in the year, as I have said, but it has been going up for five months now. The financial media always want to focus on year-on-year because mathematically that has to be slower to turn back upward. It\u2019s the longer-term measure. I was saying \u201cthree out of four months with the fourth being neutral\u201d went upward, and, before that, \u201cthree months\u201d went upward. You can see the trend. Inflation is going HIGHER for LONGER, stretching month after month.\u00a0Inflation<\/strong><\/em>\u00a0is going higher for longer, not just the Fed!\u00a0<\/strong>We are now just tacking more and more months onto the new slowly rising inflationary trend.<\/p>\n That means, of course, the\u00a0Fed<\/em>\u00a0is also going to go \u201chigher for longer\u201d or, in the very least, will be holding high for longer because this is clearly the wrong direction for inflation to be flowing. Enough months of gradual rises will, as I\u2019ve been harping on (because almost no one else is saying it), cause year-on-year inflation to start rising, too. While all of these latest months have been incremental rises, inflation has clearly moved in the wrong direction for five months now! So, let\u2019s just dispense with the \u201cinflation is going down\u201d that we\u2019ve heard every month just because YoY inflation (the bigger ship that turns more slowly) has not put in its turn yet; but even that paused this month.<\/p>\n Still, the positive spinners whir away, putting all the optimism out there they can:<\/p>\n \u201cWe continue to believe that we are in the last few miles of the Fed\u2019s marathon battle against inflation<\/strong>,\u201d she said. \u201cThe end is in sight<\/strong>, but it is still too soon to declare victory\u2026.\u00a0The next move from the Fed will be an interest rate cut in the second half of 2024 when inflation has normalized further.<\/strong>\u201d<\/p><\/blockquote>\n Wow! What a spinning merry-go-round from the mainstream financial media.<\/strong>\u00a0All hype, even when the news is truly bad for inflation\u2014five months now of rising. The brief pause last month did not manage to turn the recent new three-month trend back downward, as the move shown in this month\u2019s report for November now proves. I didn\u2019t think it would. It\u2019s all baloney all the time from these guys.<\/p>\n CNBC\u2019s headline even went this far:<\/p>\n Inflation fears down, consumer optimism up:\u00a0<\/strong>Economy may start to help Biden with voters.<\/strong><\/em><\/p><\/blockquote>\n I suppose, if voters want month after month of increasing inflation, it will help Biden out, or if the press can keep spinning rising inflation as a\u00a0success<\/em>\u00a0story enough to make the big lie come true in the minds of voters, then it should help him.<\/p>\n The hoopla, of course, is helping markets get around the bad news, so stocks edged up today, more than happy to grab the fringe of the report and not even think about the fact that it\u2019s the fifth month of an upward trend. If consumers are feeling better, as the title claimed, it is because the press has been outright lying for almost a half a year by saying inflation was falling each month, when it was rising each\u00a0month<\/em>\u00a0but still falling year-on-year because of the earlier months when the Fed was having great success in it fight\u2014something it has not had in months now.<\/p>\n The last jobs report also said the Fed is no longer winning, which should mean it will likely have to tighten harder. The Fed can, of course, wait a spell to see if the lag time involved eventually starts to hand Team Fed some winning months; but still having the wrong team score a goal again and again cannot be called \u201cwinning.\u201d It cannot be called \u201cinflation is falling\u201d when inflation is the team scoring each month, even if Team Inflation has not yet achieved a winning score for the whole game. What it does mean is the Fed\u2019s feet will be held to the fire longer, which means more time for more economic damage to keep building. Neither the latest jobs report of the latest inflation reports give the Fed any latitude for backing down.<\/p>\n But consumers\u2019 growing economic\u00a0confidence<\/em>\u00a0comes on the heels of a strong jobs\u00a0report\u00a0Friday, which showed wages rising and unemployment softening, defying fears of a recession this year.<\/p><\/blockquote>\n That\u2019s one way to look at it, but a more direct way to look at it would be \u201cRising monthly inflation for almost half a year along with rising wages and falling unemployment showed that the Fed is no longer making any progress in fighting inflation, so it will have to tighten longer, increasing the likelihood that it creates a recession as it always has during its tightening cycles.<\/strong>\u201d<\/p>\n That wouldn\u2019t be pessimism either. That would just be truth.<\/p>\n With such lack of transparent truth as we read today in financial media that, by all appearances, wants to pump the markets and after hearing from the Biden Admin again today, it is no wonder that \u2026<\/p>\n The current economic mood in America is\u00a0<\/strong>unusual<\/strong><\/em>. Voters report feeling deep economic\u00a0<\/strong>pessimism<\/strong><\/em>, but statistics show they are living through an objectively strong economy.<\/p><\/blockquote>\n The statistics lie. So does the reportage. Didn\u2019t the article headline just say they report more\u00a0<\/strong>optimism<\/strong><\/em>?<\/strong>\u00a0Maybe consumers\u00a0feel<\/em>\u00a0the reality of inflation but keep\u00a0reading<\/em>\u00a0that it is going down; hence the unusual conflict in their feelings. Their reality keeps not squaring with what they are reading. (Which is why I write\u00a0The Daily Doom<\/em>\u00a0to just call it as it is so your head doesn\u2019t spin from all the gyrations in the news.)<\/p>\n Economists attribute record high inflation of the past few years to Biden\u2019s generous pandemic-era stimulus packages, along with supply chain disruptions and pent-up consumer demand.\u00a0Recent\u00a0polls<\/a>\u00a0have given Biden low marks on his handling of the economy,\u00a0<\/strong>sinking his approval rating<\/strong><\/em>.<\/p><\/blockquote>\n Didn\u2019t the headline also just say recent reports or surveys would boost his approval rating?<\/p>\n Several recent surveys have found that Biden would\u00a0lose\u00a0to former president and Republican front-runner Donald Trump, in a head-to-head context.\u201d<\/p><\/blockquote>\n Hmm. Didn\u2019t the headline say that this article is about the economy \u201chelping Biden with voters?\u201d<\/p>\n The stock-trading algorithms grab the headlines, but\u00a0read<\/em>\u00a0the article and, when it finally gets to the topic of Biden\u2019s campaign, it says the opposite. No wonder the economic mood of Americans is \u201cconfused\u201d when they are surrounded by articles that contradict their own headlines because they are so packed with lies. It\u2019s hard to see how another month of rising MoM inflation is going to help improve Biden\u2019s relationship with voters. I thought inflation was the source of their \u201cpessimism.\u201d<\/p>\n So, what a pile of mush.<\/p>\n In poll after poll, consumers say they see scant evidence of Biden\u2019s achievements, only the high\u00a0price tags\u00a0for essentials like rent and food.<\/p><\/blockquote>\n I don\u2019t see anything about today\u2019s inflation report that is going to help Biden with that. Maybe CNBC just didn\u2019t get today\u2019s inflation memo before writing the article about inflation fears. Perhaps they should have waited another hour for the actual report to come in before writing their drivel about inflation.<\/p>\n Or look at this CNBC title:<\/p>\n \u201cInflation slowed to a 3.1% annual rate in November<\/strong>\u201d<\/p>\n And then the summary comments that immediately follow:<\/p>\n \u201cExcluding volatile food and energy prices, the\u00a0core CPI\u00a0<\/strong>increased<\/strong><\/em>\u00a00.3% on the month and 4% from a year ago<\/strong>\u2026.\u00a0The consumer price index, a closely watched inflation gauge, increased 0.1% in November, and was up 3.1% from a year ago<\/strong>, the\u00a0Labor Department reported Tuesday.\u00a0Economists surveyed by Dow Jones had been looking for no gain and a yearly rate of 3.1%….<\/strong>\u00a0While\u00a0the monthly rate indicated a\u00a0<\/strong>pickup<\/strong><\/em>\u00a0from the\u00a0<\/strong>flat<\/strong><\/em>\u00a0CPI reading in October,<\/strong>\u00a0the annual rate showed another decline after hitting 3.2% a month earlier\u2026. The Fed \u201cwill probably talk about continued disinflation being good news.\u201d<\/p>\n In fact, however, if it hadn\u2019t been for a significant decrease in fuel costs, overall inflation (headline YoY CPI) would have been notably higher, instead of incrementally lower, but even lower energy costs could not help MoM inflation look better than last month or core inflation.<\/p>\n Zero Hedge<\/em>\u00a0gets the headline as it should be:<\/p>\n SuperCore CPI\u00a0<\/strong>Jumps<\/strong><\/em>\u00a0Back Above 4.00%<\/strong><\/p>\n Core CPI accelerated modestly\u00a0MoM<\/strong>\u00a0(as expected), rising 0.3% (from +0.2%) with\u00a0Core CPI YoY flat at 4.0% from October…<\/strong><\/p><\/blockquote>\n So, the decline in YoY inflation has now completely stalled (held flat), and the flat month we saw in MoM inflation in October has now resumed its new trend of rising. Everything is moving in the wrong direction for the Fed. Since the Fed pays attention to\u00a0core<\/em>\u00a0inflation, there was NOTHING here to support the market\u2019s Fed-pivot fantasy.<\/p>\n Most problematically for The Fed (and the ‘rate-cut-hypers’) is the fact that\u00a0Core CPI Services Ex-Shelter (SuperCore) rose 0.5% MoM (hot) and 4.08% YoY (back above the Maginot Line of 4%)<\/strong><\/p><\/blockquote>\n That\u2019s what the focus in this report should be. Of course,\u00a0ZH<\/em>\u00a0has often been one of the rate-cut hypers, itself, talking about the pivot being right around the corner because it believes Powell will weasel out. Sometimes they have practically been pivot champions. (Now that inflation is clearly not going that way, however, they subtly shift sides \u2014 as I\u2019ve seen them do in the past \u2014 to pretend as if the rate-cut hypers are the\u00a0other<\/em>\u00a0guys.)<\/p>\n
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