The Consumer Price Index for All Urban Consumers increased 0.4% in April on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, headline inflation rose 1.1%.
While that’s a sharp increase, it was expected (it matched the consensus estimate of 0.4%, according to Barrons.) Non-seasonally adjusted inflation was up 0.47% in April.
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Also, I have updated my ‘Tracking Inflation and I Bonds‘ page with the new numbers.
The Fed appears to be walking a fine line between an artificially low fed fund rates which could create inflation and possibly raising the Fed funds rate which could cause deflation.
They are really in a tough pickle from the last 8 years of QE.
It seems like we are in a kind of deflationary inflation where basic needs like food, healthcare, and energy and inflationary and discretionary spending is becoming deflationary. Not a great situation. I worry about the stagflation era of the 70s.
I just question how do I profit from this.
Looks like we are seeing the effects of higher gas prices which have gone up from 1.50 a gallon to 2.00 a gallon, a 33% increase.
I’m happy to have gotten those 30 year TIPS in February, I had a feeling it was a good short term deal and the real rates have dropped. Love making easy money. And at the worst I hold the stupid thing 30 years.
Gas and overall energy prices are rising off huge lows, so that is a big factor. But it is interesting to see core inflation now above 2% for the last 12 months – and that doesn’t include energy or food. If gas prices rise too high – that doesn’t look too likely right now – it would put a damper on consumer spending, and that could be deflationary. The Fed is walking a fine line.