McCullough: “No Such Thing as Inflation Deflating Right Now”

Our Monthly Inflation Nowcast nailed Wednesday’s CPI report, which slowed to 2.5% for August, consistent with our #Quad4 call. 

In this clip from The Macro Show, Hedgeye CEO Keith McCullough explains his expectations for future stagflation and inflation’s re-acceleration in the coming quarters.

Shelter inflation remained stubbornly high in August, contradicting the broader deflation narrative. A headline from Yahoo Finance today hilariously reads: “CPI Shelter Index Showed ‘Mysterious’ Rise.

“Shelter is a third of the CPI, and the base effects of shelter are no longer going to be the friends of the doves in the fourth quarter and into the first,” said McCullough.

Mainstream Wall Street media, including outlets like CNBC, continue to avoid reporting anything that challenges the Fed’s narrative that they are succeeding in their war on inflation.

“Every American that has a budget knows that the cumulative inflation for the last 3 years is high and rising. There’s no such thing as inflation deflating right now.”

“That’s why people don’t trust Wall Street, because they’re lying.”

***We encourage you to break free from the Old Wall noise and narratives. Subscribe to The Macro Show for actionable insights delivered daily before the market opens.

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[JimCollins-hu]

If inflation continues to re-accelerate, don't you think they will be forced to increase interest rates? It's not like they have the option to just stand back and watch it increase and hope it comes back down. They indicated they will act not just if it does not re-accelerate but if it does not demonstrate, it is actively on the way down to 2%, so the likelihood of an interest rate hike seems very significant. There's nothing to naturally bring inflation down at this point unless the labor I've been engaged in active trading, which is generally safer, allowing investors to weather market volatility and also managed to grow a nest egg of around 2.3Bitcoin to a decent 24Bitcoin....I'm especially grateful to Adriana Jensen, whose deep expertise and traditional trading acumen have been invaluable in this challenging, ever-evolving financial landscape.

[tomgoudreau]

Interesting that China economic challenges are not exporting deflation pressures.

[Makronauta]

Ladies and gentlemen, behold Exhibit #3: The day trader masquerading as a macro guy