Inflation Soars but Markets are calm
[MSN] Consumer prices just posted their largest one-month jump in nearly 13 years, a fact that might tempt some to conclude that a white-hot U.S. economy is on the brink of runaway inflation.
But a spike in the June 2021 consumer price index reading may, in fact, be little cause for alarm.
That's because a significant reason for the overall prices increase is thanks to a dizzying rise in one isolated area of the economy: Used car prices.
[It is surprising to me but even the bond market is stable and at very low rates, e.g. below 1.4% for the 10 year T bond]
- A hot June 2021 consumer price index may not be cause for alarm thanks to a dizzying, but isolated, rise in used car prices.
- "The headline CPI numbers have shock value, for sure; however, once you realize that a third of the increase is used car prices, the transitory picture becomes more clear," wrote Jamie Cox, managing partner at Harris Financial Group.
- The Labor Department reported on Tuesday that its CPI rose 5.4% from a year ago, the largest jump since August 2008.
Posted by: Lord Garth 2021-07-14 |