The Weekly Update 5/10/2024
The chart below is sourced from The Bureau of Economic Analysis (BEA) and created by Califia. It is a graphic of our inflation rate year over year since 1970.
You may recall that just last Friday (May 3, 2024) the headlines were all about the “hot” inflation report. More like “hot air”!
On a year-over-year basis inflation is running at 2.40%. As housing costs, almost 40% of the Consumer Price Index (CPI), continue down along with used car sales and car insurance costs, it would be normal to expect inflation to continue the current trend down.
This is important as it would give the Federal Reserve the green light to reduce interest rates.
Market valuations tend to go up when interest rates go down.
As you observe the box around the data, you will see your news source’s “lie of omission”. The box goes back to 1970 and tells you one thing; we are close to the middle of a 55-year box that ranges about 1% above and 1% below the current Federal Reserve Chairman’s “2% target inflation rate”!
When I squint, I notice that since 1985 the inflation rate has been in the same box 95% of the time.
Take away: When you read, hear or see inflation is rocketing higher, it is quantifiable and source cited not true.
Check it out:
I’m interested in your thoughts, comments, and observations. Feel welcome to call, email, or stop by the office and say Hi.
Respectfully,
James O. Lunney, CFP®
CERTIFIED FINANCIAL PLANNER™ Professional
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