Wednesday, November 15, 2017

October 2017 CPI

TTM Shelter inflation at 3.2%.  Core CPI ex. Shelter at 0.7%.

This still could go either way.  It looks like the Fed will hike rates in December.  Are there enough headwinds to keep things going the right direction?  Rising interest rates late last year probably helped to passively loosen policy, but the yield curve has flattened somewhat since then.  It will be interesting to watch the yield curve over the next few months.

The story remains the same.  Maybe we eke out a few years of moderate growth, but we are on the borderline of too tight policy that could turn disastrous.  And, of course, our horrible collection of policies regarding housing continues to stifle growth and labor mobility, while claiming a decent portion of economic growth as a transfer to rentiers.

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