The CPI is Now Projected to Increase at an Alarming Rate

The Fed Sees Inflation Surging. Again? Yes, Again!

Few things are quite as important to us as keeping our clients and friends posted on the Federal Reserve’s destruction of the dollar’s purchasing power.The destruction of dollar purchasing power makes owning gold and silver not just a preference, but a necessity.

So here is the latest.

The Cleveland Federal Reserve Bank has a forecasting operation that generates “Nowcasts,” estimates or forecasts of present and near-term in price increases before all the voluminous data is finally gathered, processed, and reported. These early warning nowcasts of inflation are for two popular price indices, the price index for Personal Consumption Expenditures (PCE) and the Consumer Price Index (CPI).

Both are rising sharply above the Fed’s own inflation target.

The Personal Consumption Index is seen escalating from 3.89 percent in this year’s just-completed first quarter (Jan-Feb-Mar) to 4.56 percent in the current second quarter (Apr-May-Jun).

The Consumer Price Index in forecast to increase at an alarming rate of more than 2 percent, from Q1 rate of 3.38 percent to Q2 rate of 5.51 percent.

And that sharp quarter to quarter increase is surging inflation!

We find the proliferation of statistical indices meant to report inflation a little wearisome, as we know full-well that the politics behind the creation of some of these numbers was to soft-pedal the true extent of price inflation, so those responsible could duck blame, slinking away in the darkness.

Nevertheless the Personal Consumption Index (PCE) and the Consumer Price Index (CPI) are the most significant for policy makers and other applications. The PCE is the Fed’s preferred measure of inflation, while the CPI is headline inflation, the one in widespread use to describe individual and household experiences of rising prices.

Inflation from the Iran war is already a fact of life, unavoidable at the gas pump. But it shows up first in energy, later in food prices. It is reasonable to expect that by this summer acute inflation will be keenly felt by the American people and by people around the world. It is reasonable to expect it to drive gold and silver prices higher as faith in government money continues to fall.