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Oct 10Liked by Joachim Klement

While only one particular data point (and I am curious at how close it will be to the official number), IDT Corp released their September report of NRSInsights for transactions that they see through their POS network: it seems that on a dollar weighted basis the top 500 items increased 2.1% yoy (a decline from the 3.5% inflation reported in August) https://www.idt.net/nrsinsights-september-2024-retail-same-store-sales-report/

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If this is confirmed in the official report, that would be very good news.

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Oct 10Liked by Joachim Klement

Have we slayed the inflation dragon?

No, the dragon cannot be slain. It sometime snoozes or even goes into hibernation. We hope for the latter.

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FRED 5 year Break even inflation rate is 2.21%, which is acceptable. Since GFC 2009 we have become used to IR of 0% or so. Before that 3% was normal.

Financial Repression: it helps Fed & Treasury to repay Debt if IR is 2% with Inflation at 3%.

Conclusion - expect IR to settle at above 2%.

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