CPI vs Fed Funds Rate vs 10-Yr US Treasury Note Rate Graph

 Graph shows January 2004 through March28, 2025

Graph shows July 2020 through March28, 2025:

Kirk Lindstrom's Investment Letter

To see what stocks and ETFs are in my "Explore Portfolio" and get a full list of on my price targets to both take profits or buy more:

 Subscribe NOW and get
the March 2025 Issue for FREE!!! 
(If you mention this ad)

May CPI at 3.3% Is Still Above Fed's 2.0% Target

 Despite President Biden's "Inflation Reduction Act of 2022" (estimated to contain $500B in new spending and tax credits) and the Federal Reserve keeping its Fed Funds Interest Rate at a 20-year high, inflation at 3.3% is 1.3% or 65% above the desired or "target rate" of 2.0%.

CPI-U: This morning the US Bureau of Labor Statistics announced, "The Consumer Price Index for All Urban Consumers (CPI-U) was flat in May on a seasonally adjusted basis, after rising 0.4 percent in April". and "Over the last 12 months, the all-items index increased 3.3 percent before seasonal adjustment."

Core CPI-U: "The index for all items less food and energy rose 0.2 percent in May, after rising 0.3 percent the preceding month" and "The all items less food and energy index rose 3.4 percent over the last 12 months."

Chart: CPI vs Fed Funds Rate vs Expected 10-Yr Inflation from 2004

Chart: CPI vs Fed Funds Rate vs Expected 10-Yr Inflation from 2020

Table: Raw Inflation Data from November 2023:

Kirk Lindstrom's Investment Letter: To see what stocks and ETFs are in my "Explore Portfolio" and get a full list of on my price targets to both take profits or buy more:

Subscribe NOW  and get
the June 2023 Issue for FREE!!! 

April CPI Still Hot at 3.4% vs Fed's 2.0% Target

Despite President Biden's "Inflation Reduction Act of 2022" (estimated to contain $500B in new spending and tax credits) and the Federal Reserve keeping its Fed Funds Interest Rate at a 20-year high, inflation at 3.4% is 1.4% or 70% above the desired or "target rate" of 2.0%.

CPI-U: This morning the US Bureau of Labor Statistics announced, "The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in April on a seasonally adjusted basis, after rising 0.4 percent in March". and "Over the last 12 months, the all items index increased 3.4 percent before seasonal adjustment."

Core CPI-U: "The index for all items less food and energy rose 0.3 percent in April, after rising 0.4 percent in each of the 3 preceding months." and "The all items less food and energy index rose 3.6 percent over the last 12 months."

Chart: CPI vs Fed Funds Rate vs Expected 10-Yr Inflation from 2004

Chart: CPI vs Fed Funds Rate vs Expected 10-Yr Inflation from 2020

Table: Raw Inflation Data from October 2023

Chart: Fed Funds Interest Rate vs S&P 500 - 1993 through today

Chart: Fed Funds Interest Rate vs S&P 500 - 2019 through today

Tariffs and Inflation:  Perhaps I should have included President Trump's tariffs as a contributor to inflation stubbornly remaining above the desired 2.0% target.

If so, then President Biden's new tariffs will make inflation worse.

Yesterday President Biden announced new tariffs on goods manufactured in China. 

WASHINGTON, May 14 (Reuters) - President Joe Biden is hiking tariffs on $18 billion in Chinese goods including electric vehicles, batteries, semiconductors, steel, aluminum, critical minerals, solar cells, ship-to-shore cranes, and medical products, while retaining Trump-era tariffs on over $300 billion in goods. 

The United States Trade Representative's Office told Reuters it anticipates the effective date will be in approximately 90 days.

Spending $500B to "reduce inflation" and then implementing new tariffs then listening to others debate the merits...

Kirk Lindstrom's Investment Letter: To see what stocks and ETFs are in my "Explore Portfolio" and get a full list of on my price targets to both take profits or buy more:

Subscribe NOW  and get
the May 2023 Issue for FREE!!! 

Discuss this article at my Investing for the Long Term Facebook group.

Inflation Soars to 40 Year High

CPI-U @ 7.5%: Today the US Bureau of Labor Statistics reported that in January 2022 the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6%. Over the last 12 months, the all items index increased 7.5 percent.

Core CPI-U @ 6.0%: "The index for all items less food and energy rose 0.6 percent in January, the same increase as in December. This was the seventh time in the last 10 months it has increased at least 0.5 percent.

Highest Inflation in 40 years:

The all items index rose 7.5 percent for the 12 months ending January, the largest 12-month increase since the period ending February 1982. The all items less food and energy index rose 6.0 percent, the largest 12-month change since  the period ending August 1982. The energy index rose 27.0 percent over the last year, and the food index increased 7.0 percent.  

Energy

The energy index increased 0.9 percent in January. The electricity index rose sharply in January, increasing 4.2 percent. The gasoline index fell 0.8 percent in January after rising rapidly in the autumn of 2021. (Before seasonal adjustment,  gasoline prices rose 0.1 percent in January.) The index for natural gas also declined in January, falling 0.5 percent after declining 0.3 percent in December. 

The energy index rose 27.0 percent over the past 12 months with all major energy  component indexes increasing. The gasoline index rose 40.0 percent over the last year, despite declining in January. The index for natural gas rose 23.9 percent over the last 12 months, and the index for electricity rose 10.7 percent.

2/10/22 Biden Barometer:  Stock Market & Oil Price Performance under President #46 Joe Biden 

See #BidenBarometer

Full Press Release https://www.bls.gov/news.release/cpi.htm