Inflation suddenly reignites
Spike in Treasury yields as prices paid by businesses surges, loan activity jumps at banks, and China stocks crash.
River is our Bitcoin exchange of choice.
Securely buy Bitcoin with zero fees on recurring orders, have peace of mind thanks to their 1:1 multisig cold storage custody, and withdraw at any time. Need help? They have US-based phone support for all clients.
Now introducing River Link 🔗allowing you to send Bitcoin over a text message that can be claimed to any wallet. Give a gift, pay a friend for dinner, or orange pill your friends, completely hassle-free.
Use River.com/TBL to get up to $100 when you sign up and buy Bitcoin.
On Sunday night, Jerome Powell’s interview with 60 Minutes was released, one that mostly featured nothing he nor other Fed members haven’t already told us. Powell reiterated that the Fed would keep rates where they are until it is more confident that price inflation is heading down to its long-run target of 2%—notably, he said that price inflation didn’t have to fall for rate cuts to start, only that the Fed was convinced that 2% is where it is going. We won’t have to wait for immaculate disinflation for rate cuts, in other words, only for signs of a slowdown in the rise of CPI.
Instead, what did the warning fires say today? ISM Services PMI Report on Business Prices, or prices paid, is a popular measure we use here at TBL to see what CPI inflation is doing under the hood of the economy. Upstream prices that businesses are paying will generally pass on to consumer prices reflected in the CPI with a ~6-month lag. Prices paid in January shot up to 64, way higher than the expectation for a minor decrease to 57.4.
Upstream indicators of consumer prices are still elevated. Powell “cutting cuts” out of the calendar, for now, is a good choice by the Fed so as to not risk spooking a bout of sudden price inflation re-acceleration: