Hotter than expected CPI (as food costs reignite) and ugly jobless claims data (somewhat affected by Hurricane Helene) signal stagflationary pressures may be returning.
Not even US lottery tickets are immune to the inflationary disaster created under the Biden/Harris administration.
Mega Millions ticket prices will rise from $2 to $5 in April 2025, but the company - doing its best Stephanie Kelton impression - promises "bigger jackpots" and more chances to win, according to Consumer Affairs.
Of course, they mean bigger nominal jackpots, as by the time the changes are implemented it'll likely cost $50 for your morning coffee, but I digress.
For the 52nd straight month, core consumer prices rose on a MoM basis in September (+0.3% MoM - hotter than the 0.2% expected) - the strongest since March. That left Core CPI YoY up 3.3%, hotter than the 3.2% expected.
Could the US be really replaying the '70s once again?
Source: Bloomberg
Will that really be Powell's legacy? Or will the timing of this resurgence in inflation be perfectly timed to coincide with Trump's election victory?
Anyway US Stocks ended lower (with Small Caps the biggest loser) despite a late-day panic-bid into the close.
The US dollar rallied for the 8th day in a row - the last time this happened, The Fed had just started hiking rates in April 2022.
Despite the US dollar's gains, gold also rallied overnight back to USD $2,646
Bitcoin barfed late on today, back below the USD$60,000 Maginot Line once again (after an SEC lawsuit against digital asset market maker Cumberland DRW sparked more regulatory FUD).
The mixed nature of the overnight data means that traders are trying to express the view that inflation is still a problem, but that the labor market is maybe weakening too, which will mean The Fed goes ahead with rate cuts anyway.
Have a good weekend
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Andy is the founder of ANDIKA Pty Ltd, a licensed securities & derivatives dealer. He's the author of fiction and non-fiction books and has been a University lecturer on risk and investment.
