Where is Inflation Heading Now?

📕 WHERE IS INFLATION HEADING NOW?

Cullen Roche | Discipline Funds

Roche says, “Inflation bumped modestly higher in the August reading of CPI to a rate of change of 3.7%, up from 3.3%.¹ This is well off the high of 8.9% in June of 2022, but also well above the Fed’s 2% inflation target. Core inflation has been a bit stickier at 4.4%, but also well off the high of 6.6% from last September.

Core CPI has been stickier in large part because services inflation hasn’t come down while headline CPI has dropped sharply in response to much lower goods inflation. A big chunk of that is commodity prices which are down 25% year over year. Interestingly, if you exclude shelter the rate of inflation is just 2%, already at the Fed’s target rate. But shelter and other services have been sticky.” Click here to read more. 

🎧 A RAGS-TO-RICHES STORY FROM NEW ORLEANS

Check out Sam Zemurray’s Founders podcast on what he learned from rereading The Fish That Ate the Whale: The Life and Times of America’s Banana King by Rich Cohen. Click here to listen. 

📗 RETIREMENT ISN’T THE GOAL

Jonathan Clements | Humble Dollar

Clements writes, “We all like to think we’re consistent in our views. I certainly do. Yet, as I recall how I thought about the financial world two decades ago and how I think about it today, I’m amazed at how much my views have changed. Here are five pieces of advice that I give now—but which I wouldn’t have given two decades ago.” Click here to read more.

📙 PROFIT MARGINS CONTINUE TO DEFY SKEPTICS

Sam Ro | Tker

Ro states, “Stocks pulled back last week with the S&P 500 shedding 1.3% to close at 4,457.49. The index is now up 16.1% year to date, up 24.6% from its October 12 closing low of 3,577.03, and down 7.1% from its January 3, 2022 record closing high of 4,796.56.

Recent market gains can be attributed to the outlook for earnings growth. And some of that expected earnings growth can be attributed to what’s arguably the most unexpected development in the corporate world over the past two years: The resilience of profit margins. Click here to read more. 

Have a great weekend!