What "Low-Flation"? Core CPI Jumps Most In 3 Years As Food Costs Push Higher

Tyler Durden's picture

The Fed is losing its reasons for printing, leaving it desperate to revive the meme that the US economy is in self-sustaining recovery mode. At 2.0% Core CPI has caught up with the hot-flation of PPI removing the crutch of low-flation easement the Fed has been relying on. While Ex-Food-and-Energy is surging (well above expectations), the food index rose 0.5% in May after increasing 0.4% in each of the three previous months; and the index for food at home increased 0.7%, its largest increase since July 2011. This is all happening against a backdrop of real hourly wages dropping 0.1% YoY.

 

Does this look like the Fed has inflation concerns under control?

 

Driven by "Food at Home" costs soaring...

 

Full Breakdown

 

The bottom line is that The Fed just hit its inflation target (in fact it exceeded it) and along with reaching its employment target (which has now been changed), there are very few defensible arguments for them to stay so easy - aside from saving us all from a fate worse than death, falling asset prices...