Inflation Soars, Taper on the Way

If you’re wondering what the noise was, it was the Fed’s “transitory” explanation doing a big fat face plant after June’s inflation data were released.

Headline annual CPI came in at 5.4%, the highest print since June 2008 and the second highest since Nov 1990. The 0.9% MoM print (headline and core) was also the highest since June 2008. Core CPI, at 4.5%, was the largest increase since November 1991.

Importantly, the data reveals that although energy prices might have led the charge to these lofty levels…

…inflation is now both widespread and endemic. Most categories increased by at least 4% YoY and nearly all categories increased in June at an annualized rate of over 4%.