- Consumer Price Index (CPIAUCSL): +0.3% m/m (+0.1% m/m prior);
- Producer Price Index (PPIACO): -1.3% m/m, -3.3% y/y. New 2-year low.
- 30 Year Mortgage Rate (MORTGAGE30US): 6.66% (+4 bp w/w).
- 10 Year Treasury (DGS10): 3.97% (-8 bp w/w).
- Fed Balance Sheet (WALCL): +5.7B
- Total Bank Credit (TOTBKCR): -21B (-0.12% w/w); heading lower after 6 weeks of expansion.
- Strategic Petroleum Reserve (WCSSTUS1): 355k +606 (+0.17% w/w), slight refill.
The CPI release on Thursday (0830 Eastern) caused some volatility – metals jumped higher, then sold off hard. Treasurys sold off hard too, but eventually bounced back. Mostly. Given that energy prices haven’t risen – why is the CPI moving higher? WolfStreet has the details:
Beneath the Skin of CPI Inflation, December: Not in the Mood to Just Go Away (Source – wolfstreet)
Long story short: “services inflation”, a.k.a. “core services less energy service” = 0.44% m/m (annualized: 5.28%). Cherry-picked, some of the largest components include:
- medical care services & insurance +0.7% m/m
- motor vehicle insurance +1.5% m/m (+20% y/y!)
- movies, concerts, sports events +1.6% m/m
- airline fares +1.0% m/m
- pet services +0.8% m/m
It still appears to be a tale of vaxxidents and healthy, in-person worker shortages. Mainstream, as always, remains baffled. Something mandated certainly was “Safe” & Effective at causing seemingly unstoppable “services” inflation.
Odds of a rate cut at the next meeting? 5% at the next (Jan 31) meeting, and 81% by March 20, according to CME Fedwatch Tool. Will things play out this way if services inflation continues to rage? “They” had better keep a lid on commodity prices. It is their only hope. Nobody likes the Biden-Handler policy – the open borders, the endless money for foreign wars, so – short-term – cheap commodities are their only hope. I suspect the Bankster Cartel (a branch of “them”) is doing the heavy lifting.
Gold was mostly flat this week, rising 1.80 (0.09%) to 2051.60. Gold fell for most of the week, recovering all of its losses on Friday. Friday’s good-sized move (+32.40) happened slowly across the day rather than being a price move triggered by some event (like a new war, or a new economic release). Reading the tea leaves, it feels a little like
by vtgothic 
