The Investing Implications Of Price Creep
By Russ Koesterich: Tuesday's April Consumer Price Index report (CPI) was generally received as providing more evidence that inflation is under control. What many market watchers missed, however, was that core inflation, inflation excluding volatile food and energy prices, is displaying a worrisome trend for both consumers and investors - price creep, or a gradual and almost imperceptible increase in prices.Here are just a few of the worrisome core inflation data points:
- At 2.31%, April's core inflation figure was the highest since September 2008.
- April was the seventh month in a row in which core inflation was above the Fed's stated target of 2%.
- April's core inflation reading was nominally above the 20-year average.
To be clear, this doesn't suggest that alarmist predictions for Weimar-style inflation are about to come true. As I've mentioned before, it's hard to argue that inflation in the United States is about to accelerate in any meaningfulComplete Story »