Inflation is Always and Everywhere a Tricky Phenomenon

Thurs, SEPT 14th, 2017

Great post from Josh Brown regarding today’s hotter than expected inflation reading per BLS data. Read Josh’s quick take here. And, from Bloomberg.

On the news the CME-controlled fed funds futures market is now pricing roughly even odds for a Fed rate hike at the December 13th meeting, up from approximately 30% as recent as one week ago. As I often say, one data point does not a trend make. It’s too early to draw any conclusions from today’s data, particularly given the years-long underlying forces keeping accelerating inflation at bay (low productivity, shifitng structural labor force dynamics, modest capacity utilization). Nevertheless, after calling the June hike correctly (here, here, and here) we’ve been in the 50/50 camp for a December hike, while firmly believing that balance sheet reduction will commence in September. That’s the easy part, though. How this will all ripple through the economy, stock and bond markets in the months and years to come … that’s the bigger question.

Jason L. Ware, MBA / Chief Investment Officer
Albion Financial Group
(801) 487-3700