Broker Check

Commentary: April 2024

April 26, 2024

The components in the consumer price index, their weighting and how they are calculated is continuously debated in economics circles. So, when I listened to an interview on Bloomberg radio recently, the following caught my attention.

First, the speaker stated that, to the vast majority of people, inflation is primarily the cost of food and energy. The other components: housing, apparel, transportation, medical care, recreation, education, communication, and other goods and services, have a widely different impact on people's cost of living depending on a long list of variables specific to them. 

His second point was that wars are inflationary. His examples were during; the Korean War Vietnam War, the Arab embargo of ’73, Iraq wars and now the Russia-Ukraine War.

This added evidence to my long-held opinion that the Federal Reserve has less power to influence the rate of inflation than popularly believed.

To quote Jim Bianco of Bianco research LLC., "A 5 1/4% Fed funds rate has not slowed the economy. Anything but."

If there are topics you would like me to cover in future emails, feel welcome to send me your ideas by replying to this email. Your email will come directly into my inbox. 

Warm regards,

Bruce Pienton

Managing Partner

Important Disclosure

Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.
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