Is this why BTC and gold are pumping?
https://www.bls.gov/cpi/
The US CPI calculation is to be changed from Feb 2023 (Jan data).
The old calculation data is to compare the current data to the 2 prior years, the new calculation data only compared to the immediate prior year.
The effect on CPI YOY% change will be:
- In a hot inflation period it will go up faster.
- In a cold inflation period it will go down faster.
- In short add or deduct 2% to 3% to the prior 10 year historic data. Looks like Powell's target of 2% inflation just got easier.
Currently the inflation is cold(er), so the desired effect will be inflation falling faster and further. The result will be FED rate hikes ending earlier, and even rate CUTS by the end of 2023. Much sooner than the previous CPI calculation. HINT: Just in time for election year 2024!
Why now ?Politics, election year, debt levels, inflation adjusted entitlement payments, interest expense explosion, bond market support. In short when a country debt is greater than GDP the government tends to cheat, create inflation and lie!
POINT: SP500 ALL TIME HIGHS just got easier!
CAUTION: If inflation heats up again (say OIL to $150) CPI will shoot back higher quicker than before. CPI, interest and markets rates will now be more volatile.
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