For October, we've had the C-CPI-U, CPI-W, CPI-U, R-CPI-E, Median CPI-U, PPI Final, PPI Intermediate. Confused? Maybe that's the point!
Now it's time for the PCE, PCE sans Food and Energy, and Trimmed Mean PCE, to round out the inflation reports for October.
The Forecast... PCE 5.08% and the Core PCE at 4.09%.
The Result... PCE 5% and the Core PCE at 4.1%. Oh, and the Trimmed Mean PCE is at 2.6%.
The monthly PCE was forecast at 0.7% and the core at 0.44%. Result was 0.6% and 0.4% for Core.
What does any of this mean? Frankly, I am only concerned about My Price Index and the direction it might be headed, and right now that direction is upward.
So naturally, I am interested in the FED decisions to raise interest rates to slow inflation. But which rate of inflation is being watched. I know everyone has their own belief and the FED is theoretically supposed to keep inflation near the 2% level. But again, which rate, is it core... or is it trimmed.
A bit of history about the 2% target. It is not set in stone. For most of the past decade the debate has been about raising that targeted rate. Google it, as there are many articles regarding this matter.
To the matter at hand... the FED has adopted an average of 2% and to make up for past "low" inflation...
By adopting average inflation targeting, the Fed is communicating that 2 percent is not a ceiling for inflation and that it may let inflation exceed 2 percent modestly and temporarily to make up for past low inflation. The key aim of this policy shift is anchoring inflation expectations.
Just how long is that timeline and which inflation method is being used?
I would say the FED is in between a rock and a hard place, but I think the more accurate description is as follows...
Image a silk table cloth on a table. Atop that table cloth a house of cards has been built. Now you must remove that silk table cloth... without bringing down that house of cards.
What does that mean? I still have an imagination at my ripe old age.
Other stats from this morning (monthly, not adjusted for inflation).
- Advance Durable Goods... -0.5%
- Advance Wholesale Inventories... +2.2%
- Advance Retail Inventories... 0.1%
