Brought some gifts to illustrate:Thursay is the next...

Brought some gifts to illustrate:

Thursay is the next announcement for core CPI (below) and forecasts I've read suggest 6.5 or 6.6 for September which would mean core CPI is stuck above 6 since January and now on an increasing trajectory. If this becomes sticky above 6 and reflected in core PCE which is the the Fed's preferred metric, the Fed is in all sorts of trouble.



So this is the core PCE that the Fed like above all else to measure inflation, while there is a hint of decrease throughout the year we see in the previous month both reversed course to increase, so if the core PCE were to push towards the peak again like core CPI that would also indicate stickiness at the 4.7-5.3 level which would be much trouble as the Fed ideally would like to create a real rate say 50bps above this. If this core PE stays at this level there will need to be another reassessment of peak Fed rate going to perhaps 5.5% which would cause another leg down for stock valuations.