JUNE 12, 2025 – The May report came in at 2.4%, at the lower end of the range that the data predicted. The most ridiculous forecast was from Goldman Sachs that expected a 2.9% reading. They could pay me half of what they pay their CPI staff and save lots of money and be more accurate with their forecasts. LOL
The 3-month annualized inflation rate is 3.0%. The 6-month annualized inflation rate is 3.8%. These figures are above the annualized rate (2.4%) and thus indicate the annual CPI should increase slightly. The data is predicting a reading of 2.6% next month. I think that will be in the ballpark. There is a chance it could go as high as 2.8%. The one thing today’s reading showed us is tariffs do not cause inflation.
The market has the Fed Funds Rate priced at 4.3-4.4%. It was recently cut to 4.25%-4.5%. The Fed doesn’t have any catching up to do. There will not be a reduction in this rate at next week’s Fed meeting. Also, President Trump will tweet soon thereafter condemning Powell again:)
Shalom,
The Mann
Tag Archives: Powell
INFLATION UPDATE
NOVEMBER 15, 2024 – The October report came in at 2.6%, in line with my estimate at 2.6%. ((NOTE: Per the way CPI was calculated in 1980, inflation is actually 10.3%)). The 3-month annualized inflation rate is 1.1%. The 6-month annualized inflation rate is 1.0%. These figures are well below the annualized rate (2.6%) and thus indicate the annual CPI should decline slightly. However, the data is predicting a reading of 2.9% next month. I think it will be between 2.8% and 3.0% over the next two months. Then in the 1st Quarter of 2025 we may see a significant decline.
As a side note, the monthly CPI has been at 0.20% or lower for 6 straight months. There are many areas of deflation out there.
The market has the Fed Funds Rate priced at 4.4%. It was recently cut to 4.75%. The Fed doesn’t have much some catching up to do. And Powell confirmed such this week when he said they are in no rush to cut rates. Til next month.
Shalom,
The Mann