Breitbart Business Digest: Inflation Is Back and Rising Again

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in February, confirming the upward momentum in prices and further undermining the case for rates cuts from the Federal Reserve this year. rose 0.4 percent from January, a tick above the 0.3 percent in the prior month. It has now risen in each month starting with November and is, which is faster than the prior month’s year-over-year gain of 3.1 percent. Wall Street had been expecting the 12-month figure to hold at 3.1 percent.

When discussing inflation, it is often helpful to annualize the most recent numbers. The 12-month figure is what gets reported in headlines and is probably psychologically and politically important. But it isAnnualizing the more recent numbers also helps put them into perspective. The February increase annualizes to 5.4 percent, which is extremely high and the. If we annualize the past three months of inflation, we get a four percent rise. Six months annualized gives us 3.2 percent.

That progression is important. One month annualized is higher than three months, three months is higher than six months, and six months is equal to 12 months. Which is to say that that. The story of disinflation ended around eight months ago, and now we appear to be in a new wave of inflation.“Inflation’s downtrend ended eight months ago , right as Wall Street invented a term for inflation’s decline,,” Bianco tweeted Tuesday.

The Biden administration’s budget deficits continue to fuel excess demand without doing much to boost supply. Inflation is re-igniting, and there is a danger of significant overheating. This should keep the Fed from cutting interest rates in June or July—and very likely for the rest of the year.

 

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