patrick.net

US 2y yield rises above 0.96%, Highest since May 2010.

I think inflation will really start to get going soon. Interest payments on the national debt are going to rise significantly and all that money coming out of interest payments is going to have to find something to do with itself. Especially with the fed continuing with QE. On the other hand, an emerging market debt crisis and devaluation might allow us to export our inflation, but that will take a while to develop.

narrator says

I think inflation will really start to get going soon

The down turn in energy has kind of run it's course, unless it gets lower, that downside to core inflation has been done.

X energy service inflation is running at 2.9%

Logan Mohtashami says

The down turn in energy has kind of run it's course, unless it gets lower, that downside to core inflation has been done.

Core already excludes energy.

tatupu70 says

Core already excludes energy.

X energy service inflation is actually running at 2.9% now

But the way YoY inflation metrics are calculated, unless oils goes down again, we won't see deflationary pressures anymore from oil.

Shorter trim CPI 6 months are already picking higher.

PCE inflation isn't the best metric to use, it's been below 2% 50% of the time for the past 20 years.

Really,

3 month
6 month
1 year
2 year
The Dollar in the last 18 months have done a lot of the Fed's Core work form them

Unless

CPI core
ECI wage Index
JOLTS/Avg YoY grow

I am not sure how many rates hike they will do unless they see more action here, but short term inflation good enough for them to hike

Sticky CPI

A lot of the CPI inflation has come from rent, but the last number

Core #CPI, ex-housing, 1.18% from 1.00%. Highest since mid-2014.

Primary Rents actually decelerated to 3.64% from 3.74%, and OER roughly unch at 3.08% from 3.09%

In short, their is now a real time uptrend in Inflation and staying at Zero doesn't seem practical anymore

The real debate comes between a group that believes #ZIRP is emergency interest rate policy vs a Group that believes their is demographic, technology, debt and globalization deflationary factors that have been working on a downward rate pressure for 34 years,

So, the real fun begins now because a 0.25% hike means nothing in big terms, it's now what do they do going forward.

A lot of economic credibility has gone out the door, with the QE recession, QE4, Fed will never raise rates ever again... but it comes from a group that have been bearish on humanity for a while now