inflationguy.bsky.social

inflationguy.bsky.social

@inflationguy.bsky.social

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inflationguy.bsky.social
@inflationguy.bsky.social

Higher Interest Rates Can Lead to Higher Rents! I don’t generally recommend particular researchers, although I’ll point to someone who has a sharp idea when it attracts my attention....

inflationguy.blogHigher Interest Rates Can Lead to Higher Rents!I don’t generally recommend particular researchers, although I’ll point to someone who has a sharp idea when it attracts my attention. In the latter category, I have to point to the latest from Jay Parsons – an article entitled “Could Higher Rates Re-Accelerate Rent Inflation? Maybe.” It’s always useful to read out-of-consensus analysis. Reading the 122nd article about how AI is going to put us all out of work and cause spiraling deflation isn’t very useful.
inflationguy.bsky.social
@inflationguy.bsky.social

Inflation Guy’s CPI Summary (September 2026) It’s time for another CPI report. The next couple of months after this one will be interesting, since the government shutdown really screwed up the October 2025 (which… https://inflationguy.blog/2026/10/14/inflation-guys-cpi-summary-september-2026/

inflationguy.blogInflation Guy’s CPI Summary (September 2026)It’s time for another CPI report. The next couple of months after this one will be interesting, since the government shutdown really screwed up the October 2025 (which didn’t exist) and November 2025 (which used some odd assumptions about October) comps. But for now, we’re still calculating y/y over data that exists, so we have that going for us. Last month, recall that we had an upside surprise but it was due to long tails (e.g., cell phone services).
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@inflationguy.bsky.social

Real Yield Rise is Not That Mysterious A lot recently has been made about this chart. We all know that nominal yields have been shooting higher since the spring, when the Iran war began pushing energy prices up....

inflationguy.blogReal Yield Rise is Not That MysteriousA lot recently has been made about this chart. We all know that nominal yields have been shooting higher since the spring, when the Iran war began pushing energy prices up. What is surprising to some people is that while shorter-term inflation expectations have risen (they track gasoline prices with high precision, so that’s not a shock), longer-term inflation expectations have not.
inflationguy.bsky.social
@inflationguy.bsky.social

There Are Warsh Things I Could Do Honestly, I feel like I would really like to write about something other than new Fed Chairman Kevin Warsh....

inflationguy.blogThere Are Warsh Things I Could DoHonestly, I feel like I would really like to write about something other than new Fed Chairman Kevin Warsh. Because it feels like everyone is writing about him, and about his remarks at Jackson Hole. What I found remarkable was that his comments actually seemed to have relatively little effect on markets, compared to prior Fed Chairmen. I’m pretty sure that’s by design, but what is really fascinating is that while what he said seemed pretty clear to all pundits every one of them seemed to have a different read.
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@inflationguy.bsky.social

Inflation Guy’s CPI Summary (July 2026) The Bloomberg survey’s consensus numbers headed into CPI today were for +0.11% on headline inflation and +0.20% on Core....

inflationguy.blogInflation Guy’s CPI Summary (July 2026)The Bloomberg survey’s consensus numbers headed into CPI today were for +0.11% on headline inflation and +0.20% on Core. Considering the downside surprises last month, that’s a pretty tame forecast that says ‘no givebacks’ for the surprises. Last month’s downside outlier on CPI, which cemented market consensus that the Fed wouldn’t hike rates in July, was mainly the result of surprises in rents, cell phones, and car insurance.
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@inflationguy.bsky.social

Inflation Guy’s CPI Summary (June 2026) Okay, I will admit that I came into today thinking ‘this is one of the more low-stress releases in quite a while.... https://inflationguy.blog/2026/07/14/inflation-guys-cpi-summary-june-2026/

inflationguy.blogInflation Guy’s CPI Summary (June 2026)Okay, I will admit that I came into today thinking ‘this is one of the more low-stress releases in quite a while. We know headline inflation is going to be negative, and it’s just a question of whether core is 0.20% or 0.26%.' The Bloomberg consensus was for -0.12% (seasonally adjusted) on headline CPI, and +0.23% on core CPI. That core CPI forecast would annualize to 2.8% or so, clearly indicating that inflation hadn’t fully returned to target but also not super alarming.
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@inflationguy.bsky.social

This Warsh Guy Might Be a Keeper A few weeks into the Warsh Fed Chairmanship, and there are a couple of changes that I think are worth pointing out....

inflationguy.blogThis Warsh Guy Might Be a KeeperA few weeks into the Warsh Fed Chairmanship, and there are a couple of changes that I think are worth pointing out. Both are subtle, and I present them as a longtime Fed watcher and rates strategist and Inflation Guy. The first one is something I missed at first, until I heard it again. Warsh has been talking in terms of the Federal Reserve having a 2% inflation target or goal.
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@inflationguy.bsky.social

Inflation Guy’s CPI Summary (May 2026) While the worst is probably over for the monthly CPI prints, the real question going forward is ‘how much better does it get?’ We know that energy prices will eventually retreat, but even if they merely flatline they will stop flattering headline CPI....

inflationguy.blogInflation Guy’s CPI Summary (May 2026)While the worst is probably over for the monthly CPI prints, the real question going forward is ‘how much better does it get?’ We know that energy prices will eventually retreat, but even if they merely flatline they will stop flattering headline CPI. But where does core and more importantly median CPI settle in? That’s the real question. For now, we just have one more month of data so let’s dig in.
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@inflationguy.bsky.social

A New Era of Positive Stock/Bond Correlations and What That Means I read recently – I can’t find where – that stock/bond correlations in the US are the highest (most positive) they have been in decades....

inflationguy.blogA New Era of Positive Stock/Bond Correlations and What That MeansI read recently – I can’t find where – that stock/bond correlations in the US are the highest (most positive) they have been in decades. This of course is bad news for investors who commonly allocate to both stocks and bonds with the expectation that adding bonds will reduce the risk of a portfolio not only because they have a lower natural volatility than do stocks but also because the expectation of negative correlations between them have the effect of lowering the volatility of the portfolio further (since the variance of a 2-asset portfolio is equal to the weighted sum of the variances…
inflationguy.bsky.social
@inflationguy.bsky.social

My Views on Kevin Warsh as Fed Chairman I promised last week that I would give you my views about Kevin Warsh. I did so while clearly forgetting that I already have. Having heard more from him, though, I can put more meat on that bone. I must first tell you that I have a natural tendency to want…

inflationguy.blogMy Views on Kevin Warsh as Fed ChairmanI promised last week that I would give you my views about Kevin Warsh. I did so while clearly forgetting that I already have. Having heard more from him, though, I can put more meat on that bone. I must first tell you that I have a natural tendency to want to believe that our monetary policy institutions can be saved, and so I…
inflationguy.bsky.social
@inflationguy.bsky.social

The USDi Return for May is Not an Estimate! This is just a brief note to clarify something about the construction of USDi, about which I’ve gotten a number of calls. Before I do, let me also tell you to be on the lookout for my blog next week, when I’ll tell you what I think about…

inflationguy.blogThe USDi Return for May is Not an Estimate!This is just a brief note to clarify something about the construction of USDi, about which I’ve gotten a number of calls. Before I do, let me also tell you to be on the lookout for my blog next week, when I’ll tell you what I think about Probable-Next-Fed-Chairman Kevin Warsh. (In the behavioral economics world we call that a ‘precommitment’ strategy that has the effect of forcing me into doing it.
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@inflationguy.bsky.social

Time to Choose Your Inflation Adventure with Velocity and Money We have CPI coming up in a few days, but M2 came out recently and it is worth commenting about, so let me drop some thoughts about the state of money and velocity right now and the context we are operating in. M2 grew 0.88% in…

inflationguy.blogTime to Choose Your Inflation Adventure with Velocity and MoneyWe have CPI coming up in a few days, but M2 came out recently and it is worth commenting about, so let me drop some thoughts about the state of money and velocity right now and the context we are operating in. M2 grew 0.88% in February, causing the y/y change to rise to 4.88% (quarterly, however, it is 6.65% annualized).
inflationguy.bsky.social
@inflationguy.bsky.social

Inflation in One Easy Lesson For Christmas, my daughter gave me the pamphlet "Inflation in One Easy Lesson," by Harry Scherman. (Yes, I am that typecast that my daughter gives me inflation memorabilia for Christmas!) It was written during World War II, and distributed by the Council for Democracy.…

inflationguy.blogInflation in One Easy LessonFor Christmas, my daughter gave me the pamphlet "Inflation in One Easy Lesson," by Harry Scherman. (Yes, I am that typecast that my daughter gives me inflation memorabilia for Christmas!) It was written during World War II, and distributed by the Council for Democracy. It is so delightfully simple and direct, and makes the main point so obvious, that I want to share it.
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@inflationguy.bsky.social

Profiting From Zero Duration Inflation One of the nice features of the USDi digital currency is that its path is known with certainty well in advance. The price of USDi is determined by the interpolated CPI index value compared with the value on the reference day (315.605). So, for example, we…

inflationguy.blogProfiting From Zero Duration InflationOne of the nice features of the USDi digital currency is that its path is known with certainty well in advance. The price of USDi is determined by the interpolated CPI index value compared with the value on the reference day (315.605). So, for example, we know that today’s[1] USDi value is 1.02681 because today’s CPI index value is 324.06614, and we know…
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@inflationguy.bsky.social

Inflation Guy’s CPI Summary (January 2026) Let’s start by setting the context for today’s CPI number. A couple of months ago, we missed a CPI because of the shutdown. The BLS simply didn’t have any data to calculate the October 2025 CPI. That wasn’t the real problem. The real problem was that the…

inflationguy.blogInflation Guy’s CPI Summary (January 2026)Let’s start by setting the context for today’s CPI number. A couple of months ago, we missed a CPI because of the shutdown. The BLS simply didn’t have any data to calculate the October 2025 CPI. That wasn’t the real problem. The real problem was that the BLS’s handbook of methods more or less forced it, in calculating the November…
inflationguy.bsky.social
@inflationguy.bsky.social

My Quick, Early Opinion About the Warsh Nomination Before I tell you what I think about Trump’s nominee for Fed Chairman, Kevin Warsh, I should first confess to the fact that my opinion of Chairman Powell has changed several times since he was first nominated. That’s a user-beware warning about my…

inflationguy.blogMy Quick, Early Opinion About the Warsh NominationBefore I tell you what I think about Trump’s nominee for Fed Chairman, Kevin Warsh, I should first confess to the fact that my opinion of Chairman Powell has changed several times since he was first nominated. That’s a user-beware warning about my thoughts below, but it’s not just about me. I’ve watched the Fed since about 1990 – I wrote a book leaning against the perception of Chairman Greenspan as some kind of “Maestro” – but what happens when individuals meet institutions is that both are changed.
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@inflationguy.bsky.social

They’re Starting to Come Around on Rent Inflation For a couple of years, I have been relentlessly defending my forward inflation forecasts against a sizeable group of people who looked at various high-frequency rent indicators and concluded that rents were going to be imminently in deflation. (For…

inflationguy.blogThey’re Starting to Come Around on Rent InflationFor a couple of years, I have been relentlessly defending my forward inflation forecasts against a sizeable group of people who looked at various high-frequency rent indicators and concluded that rents were going to be imminently in deflation. (For most of the last year many of those same people thought tariffs would be a large and immediate effect increasing inflation. Fortunately for them, being wrong on both counts, at least the errors offset somewhat.)
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@inflationguy.bsky.social

Inflation Guy’s CPI Summary (November 2025) What better way to end this crazy year than with an economic data point that we don’t know how to really interpret? Happy New Year! Recall that, thanks to the government shutdown, the BLS released September CPI (by recalling workers to calculate the…

inflationguy.blogInflation Guy’s CPI Summary (November 2025)What better way to end this crazy year than with an economic data point that we don’t know how to really interpret? Happy New Year! Recall that, thanks to the government shutdown, the BLS released September CPI (by recalling workers to calculate the number based on data already collected) but didn’t do any of the normal price-collection procedures for the prices that are normally collected by hand.
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@inflationguy.bsky.social

Why Hedonic Adjustment in the CPI Shouldn’t Tick You Off I’ve worked in the inflation field for about a quarter-century (depending on how you want to count it), and I can tell you that if you really want to start a food fight at an investment conference, mention the term ‘hedonic adjustment’ as it…

inflationguy.blogWhy Hedonic Adjustment in the CPI Shouldn’t Tick You OffI’ve worked in the inflation field for about a quarter-century (depending on how you want to count it), and I can tell you that if you really want to start a food fight at an investment conference, mention the term ‘hedonic adjustment’ as it relates to the Consumer Price Index. Thanks to substantial counter-programming by people who want you to prefer…
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@inflationguy.bsky.social

Modeling Shortfall Risk versus Inflation – What a Good Hedge Looks Like When people ask me about hedging inflation, they aren’t always asking what they think they’re asking. There are two approaches to addressing inflation in your portfolio so that the portfolio grows in real terms. One of the…

inflationguy.blogModeling Shortfall Risk versus Inflation – What a Good Hedge Looks LikeWhen people ask me about hedging inflation, they aren’t always asking what they think they’re asking. There are two approaches to addressing inflation in your portfolio so that the portfolio grows in real terms. One of the approaches is to try to simply outrun inflation: “If inflation averages 3%, and I have an investment that averages 5%, I’ve succeeded.” This mode of thinking derives, I think, from the fact that all of our education has been in nominal space and in most financial modeling problems inflation is just assumed rather than modeled as a random variable.
inflationguy.bsky.social
@inflationguy.bsky.social

Does Crypto Expand the Money Supply? We live in interesting times, and let’s face it: mostly, in a good way. It doesn’t have to stay that way, naturally, and it won’t stay that way naturally. This has always been the weak spot in any system that insists on centralized management of certain…

inflationguy.blogDoes Crypto Expand the Money Supply?We live in interesting times, and let’s face it: mostly, in a good way. It doesn’t have to stay that way, naturally, and it won’t stay that way naturally. This has always been the weak spot in any system that insists on centralized management of certain functions. Of course, that’s the fundamental flaw and conceit of socialism: it relies on the active intercession of omniscient beings to order activities better than the masses of private actors can.
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The Fault, Dear Brutus, is in R* I want to say something briefly about the “neutral rate of interest,” which has recently become grist for financial television because of new Trump-appointed Fed Governor Stephen Miran’s speech a couple of days ago in which he opined that the neutral rate of…

inflationguy.blogThe Fault, Dear Brutus, is in R*I want to say something briefly about the “neutral rate of interest,” which has recently become grist for financial television because of new Trump-appointed Fed Governor Stephen Miran’s speech a couple of days ago in which he opined that the neutral rate of interest is much lower than the Fed believes it is, and that therefore the Fed funds target should be more like 2%-2.25% right now instead of 4.25%.
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@inflationguy.bsky.social

USELESS Coin vs Very Useful Coin It is rare, in the investment world, for an investment to honestly and fully disclaim its basic nature in a way that finishes the story and requires no further analysis from us before making an investment decision. I have found such an investment. It is a…

inflationguy.blogUSELESS Coin vs Very Useful CoinIt is rare, in the investment world, for an investment to honestly and fully disclaim its basic nature in a way that finishes the story and requires no further analysis from us before making an investment decision. I have found such an investment. It is a cryptocurrency/meme coin called, appropriately, USELESS. If you were to buy all of the USELESS in existence, it would cost you (as of this writing) about $272 million dollars.
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@inflationguy.bsky.social

When and How Much Tariff Effect? As we look forward to the CPI report next week, the monthly-repeating theme is ‘when will the tariff effect show up?’ The answer, so far, is ‘not yet,’ but economists who had forecasted the end of life as we know it when the Trump tariffs went into effect have been…

inflationguy.blogWhen and How Much Tariff Effect?As we look forward to the CPI report next week, the monthly-repeating theme is ‘when will the tariff effect show up?’ The answer, so far, is ‘not yet,’ but economists who had forecasted the end of life as we know it when the Trump tariffs went into effect have been befuddled. I’ve already admitted in this column that I was educated in the tradition of ‘tariffs bad,’ but that over the years Trump’s insistence otherwise has made me carefully re-think of which ways tariffs are truly bad, and which ways they’re not so bad.

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Interesting take! The distinction between the fiscal and trade deficits is crucial. Managing one poorly can compound issues with the other. Curious to see how policy evolves post-Trump era to address these twin challenges.

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@inflationguy.bsky.social

Inflation After 100 Days It is hard to believe that a third of the year is already past. Some people, of course, would say that it seems like a hundred years have passed in the first hundred days of Trump’s second term, but to me it seems like a blink. Here’s a quick mark-to-market summary of…

inflationguy.blogInflation After 100 DaysIt is hard to believe that a third of the year is already past. Some people, of course, would say that it seems like a hundred years have passed in the first hundred days of Trump’s second term, but to me it seems like a blink. Here’s a quick mark-to-market summary of where I think we stand with respect to inflation and the economy generally…after which I actually have another point for this column: