This morning’s Consumer Price Inflation report in the USA (see updated CPI chart below) reminds us that the inflation fears of yesteryear are no longer an immediate term concern. In the immediate term, inflation has been brow beaten to the mat. In the long term, we are all dead…
While I do think that, in the intermediate term, all of these free moneys will create another reflationary bubble … for now, we are a long ways away from that reality. Additionally, the notion of inflation re-emerging is no longer a unique investment thesis. Inflation always comes back.
On the margin, this is one more fundamentally positive stimulus to year over year consumer spending which, after all, represents over 70% of this ailing US economy. This is one reason why the consumer stocks are outperforming today.
Keith R. McCullough
CEO & Chief Investment Officer