Has Inflation Peaked?

Wall Street Rejoices at Latest Report [The Daily Reckoning] November 10, 2022 [WEBSITE]( | [UNSUBSCRIBE]( Has Inflation Peaked? - The stock market soars on lower inflation numbers… - The new driver of inflation… - No “pivot” until 2024?… [Urgent Notice From Paradigm CIO Zach Scheidt!]( [Click here for more...]( Hi, Zach Scheidt here… I’m the Chief Income Officer at Paradigm Press. With inflation raging (and showing no signs of coming to an end any time soon), almost everyone in America is feeling the pain in a big way. Which is why, several months ago, I set out on a big mission… my goal was to create a complete, step-by-step plan to surviving and beating inflation… one that anyone could take advantage of. Today, after hundreds of hours of research, I’m revealing all of my findings. See how to survive America’s deadly inflation crisis… [Click Here Now]( Annapolis, Maryland November 10, 2022 [Brian Maher] BRIAN MAHER Dear Reader , Today we rinse politics from our hair — the Lord be thanked — and retrain our focus on markets. The stock market was up and away today. The Dow Jones jumped a jaunty and jubilating 1,201 points. The S&P 500 and Nasdaq Composite enjoyed parallel joyrides, the former up 207 points today, the latter up 760. All is joy. Yet why? Inflation has evidently lost a bit of its roar… October Inflation Moderates October’s consumer price inflation numbers came issuing this morning. These numbers indicate a moderate taming. CNBC gives the news: Stocks surged after October’s reading of consumer prices raised hopes that inflation has peaked… October’s consumer price index rose just 0.4% for the month and 7.7% from a year ago, its lowest annual increase since January and a slowdown from the 8.2% annual pace in the prior month. Economists were expecting increases of 0.6% and 7.9%, according to Dow Jones. Excluding volatile food and energy costs, so-called core CPI increased 0.3% for the month and 6.3% on an annual basis, also less than expected. Inflation Is Still Robbing You You might bellyache that 7.7% year-over-year inflation still represents a 7.7% larceny of your money. You would be correct. And it is our sincere regret to inform you: Today’s report reveals that real wages have retreated for the 19th consecutive month. A 7.7% larceny is nonetheless a lesser larceny than an 8.2% larceny. And Wall Street is alert, keenly, to silver linings. A moderating inflation may break the Federal Reserve’s monomaniacal determination to elevate interest rates. It may give the Federal Reserve “pause.” These hopes found expression in the bellwether bond market. CNBC: Treasury yields plunged after the CPI report, with the 10-year Treasury yield falling more than 18 basis points to [3.946%] as traders bet the Federal Reserve would slow its aggressive tightening campaign that’s weighed on markets all year. Affirms a certain Tim Courtney of Exencial Wealth: Interest rates are still running everything in markets. With today’s CPI number coming down, the market is now betting pretty clearly that they think the interest rate [rises] are coming close to an end. [Urgent: Currency Wars Alert]( [Click here for more...]( “Worst case scenario is almost inevitable” -Former Pentagon Insider Jim Rickards In my 2011 book, I warned that the U.S. was engaged in a currency war. And that these wars: “Degenerate into sequential bouts of inflation, recession, retaliation and actual violence as the scramble for resources leads to invasion and war. ” Now with Putin invading Ukraine…Rising tensions with China… Inflation, recession, and supply chain issues all hitting the U.S. economy at the same time. It seems as if some of my worst fears have finally come true. That’s why I’ve recorded an urgent video message. To update you on exactly what you need to be doing to protect yourself. Because if history is any indicator, this will not end well. [Click Here To View My Urgent Video Message]( Hope and Change Markets now forecast 85.4% odds of a 50-basis-point rate increase at the Federal Reserve’s December confabulation. Only yesterday those odds read 56.8%. Conversely: Yesterday markets gave 43.2% odds of a 75-basis-point elevation. Today those odds plummeted to a wishful and hopeful 14.6%. Yet as we are fond to note, statistics are lovely liars. Does today’s inflation report truly draw an accurate sketch? Or does it distort rather than clarify? We would remind you that nearly two-thirds of consumer spending channels not into goods — but into services. These include rent/shelter. Health insurance. Automobile insurance. Travel and recreation in their various manifestations — to list some. The New Driver of Inflation We learn today that services costs presently run at their highest level since 1982. These costs are racing plenty ahead of consumer goods costs. As old Daily Reckoning hand Wolf Richter reports: “[Services are] now the driver of inflation.” For example: We learn that shelter inflation goes at 6.92% — the highest in recorded annals. We further learn that rent inflation goes at 7.52%. That too represents a record. How do you like it? Does it comfort you that gasoline prices decline if jumping rent and insurance costs wash away your gasoline savings? The weight lifts from your one shoulder merely to land upon the other. Instead of listing to starboard you list to port. You are listing nonetheless. In brief: Inflation is far from licked — it is simply on the move. What is the Federal Reserve to make of today’s report? The Fed Will Need to See More Assume today’s reported 7.7% overall inflation is accurate. The federal funds rate — the Federal Reserve’s target rate — ranges between 3.75–4%. That is, the Federal Reserve remains substantially “behind the curve.” It still has a fantastic chase on its hands before catching even. We therefore hazard Mr. Powell and mates will require additional evidence of moderating inflation before they “pivot.” Jim Rickards is with us: Another rate hike of at least 0.50% is likely on Dec. 14, which will put rates at 4.50% by year-end. More rate hikes may be in store at the 2023 Fed meetings on Feb. 1 and March 22. [Crypto millionaire James Altucher just revealed the cryptocurrency he’s piling into now… and it’s NOT Bitcoin…]( [Click here for more...]( He reveals exactly what it is on this page predicts 8,788% returns. However, events are happening RIGHT NOW in the cryptocurrency space that could swallow up this opportunity forever. If you missed the first crypto boom… do NOT miss this one. This could be your last chance for easy profits. Find out what James is recommending now… [Click Here To Learn More]( No Pivot for Some Time Like the market itself, we believe the Federal Reserve will abandon its present warpath — only not yet. They will come back into camp only after this year’s unprecedented rate increases work their way through the economic machinery. Monetary policy generally runs to perhaps a nine-month lag, or approximately so. You can therefore expect the March rate hike to affect business next month. The subsequent rate hikes — including this month’s — will pack substantially greater wallop. They will likely suck the economy into recessionary whirlpools by spring. Not Even Recession Will Induce the Fed to Pivot? But Jim Rickards is far from convinced that even recession will back off the Federal Reserve. Inflation may induce a “pause,” but no pivot — not until they have inflation securely by the collar: The U.S. economy, especially the housing market, is in bad shape heading into 2023… The Fed already knows a recession is coming. Their job is to kill inflation and inflation has proved more persistent than expected. Even if the Fed stops raising rates in March 2023, it will not cut rates until 2024 as long as core inflation is above 2.0%. In reminder, core inflation runs to 7.7%... officially at least. 7.7% inflation is miles and miles distant from 2.0% inflation. We therefore caution Wall Street against jubilance. If Jim Rickards is correct — no rate cuts until 2024 — we must assume Wall Street is in for heavy weather next year… despite today’s beautiful bounce. Climate and Weather Of course, as we repeat plenty: Climate is what a fellow can expect. Weather is what he actually gets. Jim’s climate-reading is bleak to a degree. Yet the weather may turn increasingly in the market’s favor. And the Federal Reserve may begin to blow the clouds away. We simply do not know. Yet prudence demands we remain outfitted for heavy weather. We are wagering on the climate over the weather. We would be happier to shed gear if mistaken… than to pile on gear if mistaken… Regards, [Brian Maher] Brian Maher Managing Editor, The Daily Reckoning [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) Editor’s note: Gold was up $44 today. But it’s still dirt cheap. Meanwhile, central banks around the world are stocking up on gold at a record pace. We hazard they might know something that most investors don’t. That’s why we recommend that you get your hands on some gold if you haven’t already. We also recommend that you get your gold from the [Hard Assets Alliance.]( We love the Hard Assets Alliance so much, we entered into a partnership with them several years ago. Hard Assets Alliance allows you to buy and take delivery with exceptionally low costs. Or with a single click, you can buy and store your metal in your choice of five audited vaults worldwide. It’s the hands-down easiest way to get started with gold. It’s also FREE to sign up for an account. Once you’ve completed the short account opening process, you’ll be able to shop for the type of gold bars and coins you want to buy right away. [Go here now to get started.]( Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) [Brian Maher] [Brian Maher]( is the Daily Reckoning's Managing Editor. Before signing on to Agora Financial, he was an independent researcher and writer who covered economics, politics and international affairs. His work has appeared in the Asia Times and other news outlets around the world. He holds a Master's degree in Defense & Strategic Studies. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2022 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@dailyreckoning.com. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We allow the editors of our publications to recommend securities that they own themselves. However, our policy prohibits editors from exiting a personal trade while the recommendation to subscribers is open. In no circumstance may an editor sell a security before subscribers have a fair opportunity to exit. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. All other employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. The Daily Reckoning is committed to protecting and respecting your privacy. We do not rent or share your email address. Please read our [Privacy Statement.]( If you are having trouble receiving your The Daily Reckoning subscription, you can ensure its arrival in your mailbox by [whitelisting The Daily Reckoning.](