When base effects ease, inflation accelerates. It’s a dynamic Hedgeye CEO Keith McCullough and our Macro team anticipated back in July. Now we’re seeing it play out in real time. The question is whether the Fed will act on this data to stave off more inflationary pain for consumers?
“The two-year comparative base effects have gone from steepening dramatically through June to easing not immaterially both through July and August,” explains Josh Steiner in this clip from The Call @ Hedgeye. “So, unsurprisingly, we have seen the re-acceleration in inflation.”
Fed Chair Jay Powell could help matters by announcing another rate hike next week. Don’t hold your breath though. The market currently thinks there’s a 3% chance.
“If you are not full of sh*t, you will be raising rates next week,” McCullough adds.
Click above for the full clip.
