On an annual basis, the Consumer Price Index (CPI) increased by 4.9% in April. While that’s an improvement over last year, it’s still not good. It’s more than twice the Federal Reserve inflation target. And as Peter Schiff pointed out during a recent interview with Jesse Kelly, the reality is even worse than the numbers indicate.
Was the producer price data that came out late last week really more good news on the inflation front?
That’s certainly how the mainstream media spun it. But as was the case with the April CPI data, the mainstream spin didn’t necessarily reflect reality.
In fact, there is a pro-government, pro-official narrative bias that pervades the mainstream media, including the financial media.
The CPI data for April came out this week. The mainstream spin was that it was more good news for the Fed’s inflation fight. But the actual data tells a different story. In this episode of the Friday Gold Wrap, host Mike Maharrey talks about the CPI report and the disconnect between the mainstream narrative and reality. He also highlights some interesting Q1 gold demand numbers.
Great news on the inflation front!
At least if you believe the headlines.
For example, “Consumer Prices in April Rise at the Slowest Annual Rate in Two Years.”
But if you read about one inch below the headline, you’ll discover things aren’t so great. In fact, the actual data reveals price inflation is looking pretty sticky.
With the CPI coming in slightly cooler than expected and producer prices unexpectedly falling, a lot of people think the Fed pivot is now in play and we will soon see an end to monetary tightening. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey talks about the possibility of a pivot, market reaction, and most importantly, the possible ramifications.
The CPI rose in March by 0.06%, which was less than expected. That said, as the chart below shows, the fall in Energy prices was entirely responsible for containing an otherwise high CPI.
Price inflation continued to cool with March headline annual CPI coming in at 5%. This was lower than expected and may give the Federal Reserve some wiggle room to slow down or even end rate hikes.
But it’s a mirage.
Despite the cooling trend, price inflation remains well above the Fed’s target and victory in the inflation fight isn’t imminent.
The annual rise in the Consumer Price Index (CPI) for February came in at 6%. This was down from the 6.4% annual increase charted in January. The eighth straight monthly decline in CPI seems to have restored faith that the Federal Reserve is winning the inflation fight. But everybody should probably stop and remember that the target is 2%.
Six percent is a lot bigger than 2%.
The CPI came in at 0.37% for the month of February. While this was in line with expectations, it is still a 4.5% annualized increase in prices.
And falling energy prices made the CPI look cooler than it actually was.
The markets basically shrugged off the hotter-than-expected inflation data for January. Most people remain convinced that the Fed can easily get price inflation back to 2% without wrecking the economy. But in his podcast, Peter explains that stuffing that inflation genie back into the bottle is a lot harder than most people seem to think.