Why America’s Inflation Problem Isn’t Going Away
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Money market's mad.
If money is evil, then that building is hell. Show goes on. Show goes on. Shows. Welcome to Prof G Markets. I'm Ed Elson. It is July 15. Let's check-in on yesterday's market vitals. The major indices climbed on a better than expected inflation report. More on that in a minute. The inflation reading also sent treasury yields lower. Meanwhile, Brent crude declined after president Trump scrapped his idea for a 20% fee on cargo in the Strait Of Hormuz. And finally, IBM plunged 25% after preannouncing earnings that missed expectations. It was its worst day of all time. Okay. What else is happening?
Yeah. It's odd when you said inflation is easing to 3.5%. You know, that that it is easing. It's down, but, you know, it's still awfully high, uncomfortably high. You know, as everyone knows, the Fed's target, what is 2% inflation. That's kind of what we take as being a comfortable rate of inflation. And I think under what I'll call underlying inflation, of abstracting from all the vagaries of the data. And by the way, in this report, there was a lot of noise. I don't know if you noticed, but it was a very noisy report. And you know, a lot of anomalies in the data, and I'm not sure how much to
I think the the big question is, is this gonna be the trend? Will we keep seeing the number go down? And that's what I'm trying to understand from this report. Does this tell us that inflation is now headed in the right direction, specifically down, or is this a blip? Because what we know about last month is that, you know, specifically when we look at the energy markets, people seem to think the war was over. Now here we are in July, prices are going back up, and people seem to think, no. It's not because the president told us as much.
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