My note on the US August CPI report. The longer the Fed waits to push inflation back to 2% the more painful it will be for all of us.

August inflation data demands rate hikes from the Fed. #Econ #EconSky

realeconomy.rsmus.com/august-infla...

Note that investors are pricing in a ECB and Canadian rate hike in October.

The cost of doing business, household borrowing and utilization of credit is rising around the global economy. #Econ #EconSky

US August CPI : Gasoline prices jumped 3.9%, fuel oil 10.1%, energy commodities 4.2% & energy 2.1% on the month.

Taken out to three digits the monthly increase was 0.396% which is a strong 0.4 and the core was up 0.290 a strong 0.3%. #Econ #EconSky #CPI

US August CPI : We are getting a rate hike at the September Fed meeting. This is not what disinflation looks like people. In August inflation up 0.4% and the core 0.3%. On a year ago basis its up 3.4% in the headline and 2.4% in the core.
#Econ #EconSky #inflation #cpi

For now demand destruction noted by the @IEA is offsetting reports that the Houthi’s are in control of the Yemen coastline and is part of why oil prices are falling this morning. #Econ #EconSky #Oil

Source: IEA

www.iea.org/news/global-...

Good afternoon.

Today was not a good day.

No matter how hard the usual suspects try to spin it rising oil prices & yields are a function of explicit policy decisions.
#Econ #EconSky

That 30-year yield move clearly is important in front of the 30 year float later today. One would think it’s going to be a rough 30-year issuance. #Econ #EconSky

The Real Economy, rates and global central bank policy: Given the moves in inflation data, oil prices and global central bank rhetoric one can observe a near term test of 5% is in the immediate offing. One would anticipate that if the CPI arrives hot on Friday it will move well past that. #Econ

Investors are pricing in three more rate hikes from the ECB and in my estimation a synchronized global central banking rate hike cycle is now a possibility. #Econ #EconSky

Central bankers that speak in such ways are clearly frustrated with the direction of inflation, the spreading through to the core and are almost surely read to lift rates further despite not being on pre-determined path. #Econ #EconSky

The ECB lifted its policy rate by 25bps & left the door open to another rate hike later this year.

Listening to ECB's Lagarde speak one gets the sense that the war induced energy & commodity shock is driving inflation and rates higher. #Econ #EconSky

A Fed that has tolerated inflation above the 2% target which is well into its sixth year is likely not to wait much longer. A quick look at Fed fund futures implies a 75% probability of a rate hike at the 9/16 policy meeting. If one prefers the overnight swap index it is at 70%. #Econ #EconSky

These are price increases firms can only partially absorb. They will be passed along going forward and one should anticipate that shows up in the CPI and PCE. #Econ #EconSky

US August PPI: when one parses through the data one can feel the pain of down-market consumers, small firms and midsize business.

Diesel was up 24.1%, home heating oil & distillates 22.8%, final demand for energy 4.2%, eggs for fresh use 32.2%, grains 4.3%. #Econ #EconSky

That means inflation in the wholesale pipeline is going to move higher in September and those gasoline and diesel prices will spread into the core.

This is supportive of the Fed hiking rates at its September meeting. We await the CPI on Friday to make that final call. #Econ #EconSky

It's important to note that the sampling period only goes through August 11. That is this report did not capture the recent increase in oil, gasoline and diesel prices. A look at the current equivalent of diesel prices per barrel of crude equates to $207 per barrel. #Econ #EconSky

US PPI arrives hot at 0.4% and is up 5.4% from one year ago. Upward revisions to both topline and core in July. Core up 0.2% & 4.6%. Ex food, energy and trade up 0.3% and 4.7% y/y. #Econ #EconSky

Thanks Obama. #gasprices #econ #econsky
(Los Angeles CA 9/9/26)