Fed's Most-Watched Inflation Indicator Ticks Up In October - Still Well Below Mandate

The Fed's most-watched inflation indicator - Core PCE - has been on a downward trend since short-term peaking in January (and yet the need to keep hiking rates has remained). However, October's 1.4% rise (as expected) offers some hope to Janet, Jay, and their friends that an inflection point has been reached in the transitory disinflationary spiral.

As Bloomberg notes, the central bank’s preferred price gauge, excluding food and energy, rose 0.2 percent in October from the prior month.

September’s monthly gain was revised upward to 0.2 percent from 0.1 percent, making for the fastest consecutive increases since January and February.

Including all items, prices rose 1.6 percent from a year earlier following an upwardly revised 1.7 percent; the so-called core measure was up 1.4 percent for a second month.

While the latest figures indicate progress toward the Fed’s 2 percent goal, inflation remains below target on an annual basis, as it has for most of the past five years.


chubbar I woke up Thu, 11/30/2017 - 08:57 Permalink

This is the number that Rickards is watching to determine whether the FED raises rates. I think this may give them the cover they need to do so even though it really isn't much of a rise. Since we know that they want to raise rates, for some fucking reason unrelated to this metric that no one outside of the elite seems to understand, they probably in fact will now raise rates. Rickards will be wrong this time, imo.

In reply to by I woke up

CRM114 TheSilentMajority Thu, 11/30/2017 - 09:28 Permalink

The problem for the FED, and western Governments in general, is that their deception over the way inflation is calculated now make it impossible to reach a 2% target. Real inflation is so high on basics like shelter and food, and disposable income so low, that it suppresses demand sufficiently to kill any prospect of inflation in the things they still do measure. Add in that credit can't be increased further without tipping over the precipice of widespread default, and they have painted themselves into a corner.And they can't change how inflation is calculated without revealing the real world figures.And they can't improve the economy generally because of the inefficiencies that Big Government creates to keep itself employed and powerful, and to protect the cartels of big corporations.

In reply to by TheSilentMajority

chubbar CRM114 Thu, 11/30/2017 - 09:55 Permalink

These are great points and I was just about to write some comments in a follow up but then I remembered that the BLS (or whomever is responsible) is very flexible in how they calculate shit. They may have to announce the adjustment in some obscure publication that no one will notice until months later, but they WILL change the methodology when they need to, in order to show what ever number the FED requests from them.You are correct in one regard, it's become painfully obvious to the general public that they are being lied too. They may not understand how or why, but they know these assholes are lying. As disposable income drops due to this price inflation of necessary goods, we are watching retail stores close rapidly and in large numbers. The gov't knows it is only a matter of time before they are exposed. I think 2018 is going to be the year of a false flag or something BIG that changes everything and thus let's the FED off the hook for being the crime family that they clearly are.

In reply to by CRM114

CRM114 chubbar Thu, 11/30/2017 - 10:06 Permalink

My point is that, no matter what parameters they decide to change, it will reveal the fraudulence of previous figures. The only major inflatory elements that are big enough to affect the numbers are food, shelter and other essentials. The only way for the inflation numbers to increase are if they add some of these in. That then reveals the fraud to Joe Public.The big question is When.What (anecdotal) evidence do you have for 2018, please?

In reply to by chubbar

LawsofPhysics Thu, 11/30/2017 - 08:49 Permalink

Right, because the cost of living relative to wages, and the purchasing power of those wages just keeps improving... The meme is still that "everything is awesome"...Better raise those rates Mr. Yellen!"Full Faith and Credit"same as it ever was...

tsteffanci Thu, 11/30/2017 - 09:22 Permalink

The FED is merrily sticking to the discredited notion that faster economic growth will ignite inflation. The historical record says otherwise. And the last 10 years is the latest episode. Massive demographic changes and global competitive forces in all markets have disrupted the Phillips Curve fiction. So why does "price stability" mean targeting higher inflation? It's a cover for a higher short term rate structure as insurance so the Fed will have room to drop rates again when the next financial crash occurs.

J J Pettigrew Thu, 11/30/2017 - 10:24 Permalink

The Federal Reserve has no authority to PROMOTE INFLATION!!!Deliberately doing so is a TAXATION on the holders of dollars.  Congress can pass taxes, not the Fed.And would a 2% TAX pass a congressional vote?  No.Agency Creep...... self authored mandates diametrically opposed to the agreed upon condtions and mandates that allow the Fed to operate.Someone ask the effing question!!!

khakuda Thu, 11/30/2017 - 12:38 Permalink

The Fed has no legal mandate that requires 2% inflation. Title is false. Legal mandate is stable prices. Please don't repeat the lie propagated by the academics at the Fed who have falsely interpreted the law to keep interest rates below the inflation rate and create a massive asset bubble on purpose. Unemployment is incredibly low and GDP is growing strongly. There's no reason for emergency rates at these levels other than to create an asset bubble