Inflation Rolling Your Way!

Important! Heads up Warning!

Costing Americans at least a billion dollars a day, wars aren’t cheap. It’s not just the direct expense, it’s all the second and third order effects, like rip-roaring oil prices.

The steeply rising war price of oil price isn’t factored in the latest government inflation report, yet price inflation was already headed higher in January.

The core PCE (Personal Consumption Expenditures price index) excludes food and energy and is the Federal Reserve’s go-to inflation gauge today. Never mind that food and energy are underlying components of every other price.

While the “core” price indices were created in the Nixon administration in an attempt to soft-pedal the bad news of rising prices, now core prices are outpacing the overall numbers.

The latest on the Personal Consumption Expenditures (PCE) price index from the AP:

Core prices rose 3.1%, up from 3% in the prior month and the highest in nearly two years.

On a monthly basis, prices rose 0.3% in January, while core prices jumped 0.4% for the second straight month, a pace that if sustained would lift inflation far above the 2% annual target set by the Fed.

Meanwhile, the Commerce Department had to revise its estimate of 2025 GDP growth sharply lower.  Higher prices, slower growth.  Can you spell stagflation?

Let us take a close up look at the prices everyday Americans – all of us! – are paying even before the follow-on effects of the war make their contribution soon. Here are some graphs from WolfStreet.com.

And what about energy?  Because you already see it at the pump, we’ll hold off the gasoline charts until the rising oil price is assimilated, but here is the electricity price in the meantime:

The inflation numbers are headed to the way ugly side.  Because you are not Congress you couldn’t have prevented this.  And since Congress isn’t willing to stop it, all you can do is shield yourself and your wealth from the consequences.