Here's the Real Inflation News. It's Not CPI.
The news on the price inflation front today should not be that Core CPI remains above 3% - it will be sticky. Rather, the Continuing Resolution that passed the House of Representatives will be approved in the Senate (both sides are going home early, which tells you something).
What does this mean? Passing the Continuing Resolution means that Biden-level spending is here through the remainder of this fiscal year, one in which the U.S. has run an $840 Billion deficit fiscal YTD through January. The U.S. will run a $1.8-2.0 Trillion deficit this fiscal year. That will be over $12 Trillion in deficits since 2020.
Price inflation is here to stay so long as we run this type of deficit-creating fiscal policy. Real-world price inflation is much worse than what is reported by the bogus, woefully understated CPI figure. Just look at the cost of goods and services in your life and how they have grown over the past five years. That’s reality, not CPI. Our poor fiscal and monetary policy (the latter enables the former), is the reason why prices move ever higher and why the value of the Dollar moves ever lower.
Eventually, the Treasury market will shut this deficit spending down as investors won’t want to own U.S. paper. There is a reason that Treasury does not hold many 10-year Treasury auctions - investors do not trust the U.S. to run fiscal policy over a 10-year horizon - not at a 4% yield.
P.S. the Elon Musk D.O.G.E. savings are for naught given this Continuing Resolution.