On days like today, impatient investors will react emotionally to headlines celebrating a drop in CPI. 

In this clip from The Macro ShowKeith McCullough issues a reminder that the decline from 3.7% in September to 3.2% in October is still a far cry from Fed Chair Jay Powell’s goal. 

“We still consider this higher for longer on inflation,” McCullough explains. This is nowhere near the Fed’s target. 3.2% isn’t 2%.” 

"Until you can tell me how Powell is going to change his target to above 2% … let’s say he took his target to 2.5%. We don’t have 2.5% in the model. We have 3.3% to 3.6%,” McCullough adds. “And this 3.2% surprise for half an hour or an hour of trading is not going to change anything." 

INCIDENTALLY… Today's CPI report showed Healthcare was DOWN -34%, which took about 18 basis points off the Headline number, essentially accounting for today's so-called "beat." Did anyone's healthcare insurance costs fall significantly last month? It appears the U.S. government and Fed will manipulate any data necessary to make it appear consumers are doing fine.

Real-world inflation is higher than what is being reported, and it is still being felt by Americans.

We've seen this fudging of numbers in the last NINE jobs reports (when a Non-Farm Payroll number is reported, only to be revised a month later). Now, the manipulation is creeping into CPI reports as well.

McCullough: Inflation Remains ‘Higher for Longer’ - CPI Table for TMS Clip 11.14.2023

Watch the full clip above.

McCullough: Inflation Remains ‘Higher for Longer’ - TMS Banner