A Brief Note on Inflation
This week’s PPI and CPI releases would have us believe inflation is rearing its head again. Regular readers know the weight i give to the NY Fed’s “Underlying Inflation Gauge,” or “UIG.”
Historically, this has been a much smoother measure of inflation than CPI or PPI, and has done a much better job of highlighting major inflation turning points:
And despite this week’s reports, UIG is still trending downwards - inflation is still diminishing (though it may not feel that way at the supermarket).
Sadly, this most recent UIG print is the last the NY Fed will put out, as they are switching over to the “Multivariate Core Trend Inflation,” measure next month. I will study this and report back herein to the paying subscribers.
Of interest along with subsiding inflation is YoY change in M2 and the UIG. Perhaps this may be indicating that UIG is about to bottom. As I said, we’ll keep an eye on it.
As for equities this week, we have had a couple of very reliable buy signals pop up,