by Denitsa Tsekova and Lu Wang
Yahoo! Finance
With gold, oil and cryptocurrency rallying of late amid fresh demand for inflation hedges, the March CPI report unleashed a rout across Wall Street. Yields on 10-year Treasuries topped 4.5% for the first time since November while the S&P 500 closed around 1% lower. Energy companies were the best-performing names, a reminder of the post-pandemic playbook when inflation trading was ascendant. Brent crude climbed back above $90 as geopolitical tensions heightened.
With the commodity rally stoking broader cost pressures, a cohort of traders is starting to doubt that Federal Reserve Chair Jerome Powell will be able to engineer a soft economic landing, whereby the business cycle expands at a healthy clip just as inflation eases.
Prices charged by U.S. producers of goods and services rose by 2.1 percent over the twelve months through March, an increase over the 1.6 percent annual inflation recorded in the previous month.
[Note from James: The first thing I did this morning when I saw the US government’s latest inflation numbers was to call my friend and partner Peter Schiff to enjoy a good rant about how the Fed has completely lost the war with inflation. Peter’s thoughts are below, and I agree entirely.]
At the start of the year, it looked like America’s fight with inflation was finally coming to an end.
According to the Bureau of Labor Statistics’ latest price inflation data, CPI inflation in March rose to a seven-month high, and price inflation hasn’t proven nearly as transitory as the regime’s economists have long predicted.
As we approach what is likely to be the most chaotic presidential election in U.S. history, trouble signs are starting to erupt for the U.S. economy. In fact, CNN is actually admitting that “the long-predicted storm clouds in the economy may actually be forming”. I can’t remember the last time that I saw a CNN article with a headline like that. But at this point, it is becoming extremely difficult for the mainstream media to avoid the truth. Inflation is getting worse at the same time that many key sectors of our economy are slowing down. If you thought that the last couple of years were rough for the economy, just wait until you see what is coming next. Tremendous turmoil is on the horizon, and the American people are becoming increasingly emotional about our rapidly growing economic problems.
Hotter-than-expected inflation data Wednesday threw cold water on investors’ hopes that the Federal Reserve would begin cutting interest rates as early as June – sending the markets plunging.
Ugly inflation in services drives up the 3-month “core CPI” for 7th month, to 4.5% annualized, worst in a year, and the 3-month overall CPI to worst since Nov 2022.
Consumer prices in the US rose faster than expected last month, in a sign that the fight to slow inflation has stalled.