March CPI Numbers And Reaction -- Tough Noogies -- April 10, 2024

Locator: 46968INFLATION.

Bottom Line

Neel Kashkari wins.

Core CPI year over year: 3.8% vs 3.7% estimate -- oh give me a break. Not only statistically insignificant but not even statistically reproducible. 

• some algorithm will re-run the numbers this afternoon and will get a different number
• GDPNow
• April 4, 2024: 2.5%
• today, April 10, 2024, after CPI numbers: 2.4%
  

After 30 minutes of listening to CNBC analysts, this is my takeaway at 8:08 a.m, April 10, 2024.

• for me, this was wonderful -- the March CPI number. Why?
• puts Biden's re-election hopes on notice; Mar-a-Lago folks not all that upset
• had March CPI number come in lower than expected, market would have exploded
• suggests that the January number -- which was previously thought to be a one-off was, in fact, in line with those who thought inflation was still a problem
• had the March CPI number come in lower than expected, the Fed would have been under great pressure to cut rates; this gives the Fed breathing room
• the CNBC talking heads are apoplectic -- OMG, there might be no cut rates this year
• Mama Bears with their cash in MMFs aren't complaining
• best quote by former Fed member: "tough noogies."
• only concern: house prices and rent rates
• what should you and I watch most closely? There's only one thing that today, right now, Americans can start doing if they can't make ends meet due to inflation: quit dining out;
• I'm going to watch restaurants very, very closely for next six months
• LOL, just after posting that (restaurant note) Cramer voiced the very, very same thing -- wow.....if this is a real problem, restaurants should be in real trouble
  
• and maybe fewer tattoos 

This is reason for March CPI:

Reminder: I am inappropriately exuberant about the US economy and the US market, I am also inappropriately exuberant about all things Apple.

See disclaimer. This is not an investment site.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them. 

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source.

Reminder: I am inappropriately exuberant about the US economy and the US market, I am also inappropriately exuberant about all things Apple. 

Breakfast:

• home: $1.25
• Waffle House: $12.50 -- before tax, tip

Original Post

March CPI: pending. Estimates:

• the consumer price index will be released Wednesday morning and is expected to register increases of 0.3% both for the all-items measure as well as core.
• on a year-over-year basis that would put respective inflation rates at 3.4% and 3.7%.
• markets have grown nervous about the state of inflation and how it will affect Fed policy.

March CPI, actual: 

• up 0.4%
• same as previous number
• Dow slumps over 300 points
• NASDAQ drops over 200 points
• WTI holds; up slightly
  

CNBC: comments after these numbers

• Steve Liesman:
• Fed rate cut -- more and more unlikely any time soon
• July rate cut probably off the table
• car prices, new and used came down
• airline tickets came down
• but car insurance came up
• other analysts:
• a tenth of a percent higher, does this mean anything?
• will make progress, but inflation is sticky
• why all this talk about "rush to cut"?
• in fact, this is all either known or expected; this is simply fodder for pundits
• everything going in direction as expected; maybe just not as fast as folks hoping
• jobs market strong; Fed still watching services / wage inflation
• exactly what folks expected; why all the feigned "surprise"?
• for the past year, we've never trended toward 2%; we trended toward 3% and that's where we're at
• no longer is 3% on a monthly basis a one-off -- it's now a fact of life, and could get worse
  
• again, remember the difference between "service" inflation and "products" inflation
  
• and now, blah, blah, blah
• inflation to 3% is not all that bad; one analyst has it exactly right;
• Steve Liesman seems to understand it best
  

Me? Huge buying opportunity at the open. Huge opportunity.

• no recommendation;
• see disclaimers;
• equities on sale
• some equities paying very nice dividends
• US economy surging: whatever happened to all that talk about stagflation / recession
• for me,
• Papa Bear: inflation too high and getting worse
• Mama Bear: I'm getting 5% by parking my money in MMFs; whoo-hoo!
• Baby Bear: Goldilocks 
• again, no recommendation; see disclaimers; this is not an investment site