Updated on 16 hours ago
Larry Kudlow: We're on the front end of recession
Kudlow reacts to prices rising across the board
By Larry Kudlow FOXBusiness
So many people, I suspect, agree with Biden press secretary Karine Jean-Pierre, who seems to expect that inflation has peaked, and it's on the way down and our troubles are virtually over.
KARINE JEAN-PIERRE: We expect the headline number, which includes gas and food, to be highly elevated, mainly because gas prices were so elevated in June. June CPI data is already out-of-date because energy prices have come down substantially this month and are expected to fall further.If you think that way, I beg to differ. While it's quite true oil, gasoline and food prices are the most visible price spikes, the fact remains that prices are rising across the board — not just food and energy — and this across-the-board price hike may well be getting worse, not easier.
A useful chart from my old friend and colleague Robert Sinche shows that broad inflation measures called "trimmed-mean CPIs" from the Cleveland and Dallas Fed are actually increasing, not decreasing.
These trimmed-mean measures exclude the largest and smallest price changes, in effect measuring the middle 80% of price change movement. So, they're actually broader than just food and energy. You can see that they've been rising steeply. Dallas is going from less than 2% to 4% and Cleveland is shooting all the way up 7%.
So, let that be a warning that the current inflation cycle is broad, widespread and likely accelerating.
Also, many people are talking about the recent slump in commodity prices, which do filter into the wholesale price index and also signal inflation expectations and the real value of the dollar. True enough, the dollar has gone up and commodities have slowed down, but the commodity index slowdown really looks like a dip, not a major drop.
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https://www.foxbusiness.com/media/larry-kudlow-front-end-recession
