Today’s CPI report is history. Let’s look ahead.
The lead chart shows reported CPI and PCE year-over-year numbers plus the Cleveland Fed Inflation Nowcast.
CPI and PCE Measures Plus Nowcast
- CPI July: 3.36 percent
- Core CPI July: 2.48 percent
- PCE July Nowcast: 3.65 percent
- Core PCE July Nowcast: 3.29 percent
- CPI August Nowcast: 3.34 percent
- Core CPI August: 2.38 percent
- PCE July Nowcast: 3.73 percent
- Core PCE July Nowcast: 3.34 percent
Pay attention to the orange lines. Core PCE, excluding food and energy is the Fed’s preferred measure of inflation.
Core PCE bottomed at 2.61 percent in April of 2025. It is now 3.29 percent and expected to hit 3.29 percent in July and then 3.34 percent in August.
Is the Fed suddenly going to switch to favoring core CPI after touting PCE for decades?
CPI and PCE Month-Over-Month
CPI and PCE Month-Over-Month Projections
- PCE July: 0.15 percent
- Core PCE July: 0.25 percent
- CPI August: 0.35 percent
- Core CPI August: 0.20 percent
- PCE August: 0.34 percent
- PCE CPI August: 0.27 percent
Annualized Rates
- The annualized Core PCE estimate for July is 3.04 percent
- The annualized Core PCE estimate for August is 3.29 percent
These are estimates. However, the inflation nowcasts have been quite good.
PCE Year-Over-Year Plus Projections
Given the Fed’s preferred measure of inflation is the PCE, is the Fed seriously supposed to ignore this?
I don’t know what the Fed will do, nor can I guarantee the above numbers.
But if the numbers come in as expected, Warsh better hike or the bond market will revolt higher on the long end.
30-Year Long Bond Yield
You are free to believe whatever nonsense you want about today’s allegedly great CPI report.
But the bond market does not think it was so great, and neither do I.
For further discussion of today’s CPI report and why it was not as good as the headline numbers suggest, please see July CPI Report Not as Good as Numbers Look at First Glance
The consumer price index rose the expected 0.1 percent, but significant troubles lie ahead.
I discuss three reasons why the CPI was not that great and seven additional look ahead topics.
This look ahead makes eight.
Mish, listen to Julia La Roche’s Podcast, released today with Jim Ricards. He is the not the first, but the most clearly articulate person, to call out Bessent’s Connections to the George Soros…I will not give it away, but let’s cut to it: THE FED does not WANT to talk openly any more like they used to before they got into this habit of JIBBER-JABBERING about DOT PLOTS and so on.
I think that Jim is right but MORE importantly: The YEN CARRY has fallen apart. This is not good news at all and could lead to a Global Collapse.
That is where BESSENT comes in with the SOROS connection and now he is on the WRONG SIDE OF THE TABLE, in effect and is trapped. WHAT A MESS.
It’s the Fourth Turning.
Mish,
I think you have 2 copy/paste errors in the list of 8 under the CPI and PCE Measures Plus Nowcast heading. I think the last 2 in the list should be for August, not July, correct?
Inflation is temporary, and updated to: You can forget about inflation.
The strait will stay closed through the election – and probably into 2027. The US strategic reserve will effectively run out in a few weeks. Same with other countries’ reserves.
Thank God the US is in control of it!
It was a few weeks a few weeks ago. Even Trumpstien said so.
Bonus stupidity is the permanent damage Trump will do to the SPR as it is drained below 200 million bbl.
Why didn’t Trump fill it when oil was cheap and stockpile strategic metals before starting his war?
Trump seems to be playing bluff/bully checkers in a world of accomplished chess players.
He is lying. They are TRYING to collapse the world’s Financial System and he appears to be confused when In fact NO ONE seems to be talking about how PURPOSEFUL this all seems to be.
Mish SHOULD begin to frame his blog around that fact. THIS IS ALL PURPOSEFUL and they are play-acting. Even BESSENT knows better and is simply trying to hold it together.
I also do not want to GIVE TRUMPCO much credit, so this COULD BE BUFFOONERY but we cannot be sure. TRUMP MAY BE AS MAD AS BIDEN at this point and by “MAD” I am meaning BRAIN-DEAD to a point. They may well be controlling him.
It is HARD TO DISCERN but the ear marks seem to point to MADDENING of a President or CONFUSED FROM DEMENTIA.
It is just too weird right now to tell.
The federal deficit for the month of July 2026 was 432B$. one month! Now that is inflationary! Nearly 1.8T$ year to date with two months of deficit spending to go.
wondering why bond yields are up? The US fed gov. owes $40T. I don’t they are good for it. Do you?
US gov’t will print more monopoly money to cover their IOUs
We are going to sprint up an increasingly steep and slippery slope, while throwing away our defense (excuse me, retitled “war”) assets (and soft power), and massively writing IOUs for more. Not to worry, your social security will be paid in soylent green. Those Wyoming, New Zealand, Hawaii and orbiting fortified compounds have to be paid for somehow!
This is not what taco and his fellow boot lickers are saying?
Rommel is winning in Africa. We have captured Stalingrad. Our new expensive vengeance weapons will set things right.
Correct, gasoline is leading another charge upward for inflation.
After briefly coming close to breaking below $4.00 regular is fight back to $4.59 in my market. Compare that to $2.65 the day of the election.
Food is heading higher as well.
At least we are great again…
and winning!!
I was awesome. Great is a significant downgrade.
Let’s re-define ANY TERM used to describe this mess and simply reduce it to “MADNESS.” THE “KING IS NAKED” and we are supposed to LIKE IT. Or at least SOME PEOPLE might be falling for it but I would guess it is like my Father-in-Law who is slowly losing it at 87.
Somebody claimed if your father in law gets his passport to a polling place, he gets a free MyPillow, or some Rudy hair dye.
BTW, today my login.gov doesn’t work.
What is there to like about a fourth Turning? The Great Depression and WW2 were part of the last one. Here we are again, in a similar era. Amazing how popular socialism is right now.
Pretty soon they will strip the CPI of ANYTHING we actually buy in order to create a FAKE CPI even MORE FAKE than yesterday.
Crashing faith in all government output opens a great space for privatized “innovation.” Notice the news organs coup underway.