Core Inflation Rises 0.3% MoM In December, 1.8% YoY, Owners’ Equivalent Rent of Dwelling Rises 3.1% YoY

By Anthony B. Sanders

Core Inflation Rises 0.3% MoM In December, 1.8% YoY, Owners’ Equivalent Rent of Dwelling Rises 3.1% YoY (Fed Still Can’t Generate Inflation)

I remember when Federal Reserve Chair Janet Yellen said that inflation is just around the corner. It must be a really long street.

Consumer price indices for December are out and CPI MoM rose 0.1%, but Ex Food and Energy it rose 0.3%. CPI Ex Food and Energy YoY rose 1.8% from 1.7% in November.

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Despite its wishes to generate inflation with zero interest rate policies and QE, inflation remains stubbornly low (below 2%). Core PCE Prices YoY is even worse at 1.50%.

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Of course, home prices are growing at 6.6% YoY, over 4 times core inflation (PCE). 

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Although imputed rent growth YoY is only 2x core inflation (PCE).

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So, home prices and imputed rent of dwellings are both rising at multiples of the core inflation rate … and wages.

Hopefully Yellen’s replacement can do better in terms of slowing down bubbles. But I doubt it.

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