Where is inflation headed next? Great question.
In the past six months, the CRB Index – a basket of 26 commodities, like oil and copper – is up 5%. In terms of tangible economic data on consumer prices, core inflation hit the highest level in 5 years. The Consumer Price Index (CPI) accelerated to +2.5% year-over-year in January versus +2.1% in December. Inflation has now accelerated for the 6th consecutive month.
What’s next?
In the video above, Hedgeye CEO Keith McCullough weighs the balance of recent inflationary economic data against what the market is telling us. Our proprietary indicator of future inflation suggests CPI reach the range of high 2% to low 3% in the coming months, McCullough says.
But the real question, he says, is has the market already priced-in this acceleration of inflation? McCullough offers his thoughts.