Inflation: Ahead Of Tomorrow's PCE Report

A reminder from May 10:

USDA World Agricultural Supply and Demand Estimates (WASDE): Food Inflation Down The Road

...These won't show up in the CPI or PCE deflator for months so in the meantime we should get a nice little inflation headfake lower from the housing component of the indices; setting up the next Presidential administration for a real mess in 2025 and 2026.

The Cleveland Fed Inflation Nowcast:

Inflation, month-over-month percent change

Month	CPI	Core CPI	PCE	Core PCE	Updated
May 2024	0.08	0.30	0.10	0.23	05/30
April 2024			0.27	0.23	05/30

And: 

Inflation, year-over-year percent change

Month	CPI	Core CPI	PCE	Core PCE	Updated
May 2024	3.36	3.55	2.67	2.67	05/30
April 2024			2.68	2.74	05/30

And from May 21:

Inflation: Fun With Math

 Jumping right into the gut of the argument, from TradingPlaces at StockCharts, May 19:

....Inflation Likely To Climb This Summer

There's like to be a few negative/bearish analyst comments this summer. The reason? In 2023, the June (+0.19%), July (+0.23%), and August (+0.23%) represented the 3 lowest monthly core CPI readings. That means that these monthly readings in the same 3 months as 2023 will need to come in extremely low or there'll be brief 3-month spike in the annual core rate of inflation at the consumer level. We know the stock market doesn't like uncertainty of any kind and a 3-month move higher in inflation could trigger that uncertainty.

Keep in mind that the June, July, and August readings are generally reported within the first 10 days to 2 weeks of the following month. So if we see weakness from these readings, it'll likely be from mid-July through mid-September....

....MUCH MORE

The Cleveland Fed Inflation Nowcast is looking for a .11% monthly headline figure to be reported next month as the housing component turns down. That would result in a 3.39% year-over-year rate.

Assuming the monthly figures in the post above are correct (I didn't check), even with the slowdown in the rate of ascent in housing costs we won't see headline CPI fall under 3% before the election. 

And then? Here's the outro from May 10's "USDA World Agricultural Supply and Demand Estimates (WASDE): Food Inflation Down The Road":

These won't show up in the CPI or PCE deflator for months so in the meantime we should get a nice little inflation headfake lower from the housing component of the indices; setting up the next Presidential administration for a real mess in 2025 and 2026.

 Not to put too fine a point on it but if I were Michelle Obama I'd tell Barack to put a sock in it for any idea of running for President before 2028.

See, if interested March 20's "Hotshot Wharton professor sees $34 trillion debt triggering 2025 meltdown as mortgage rates spike above 7%: ‘It could derail the next administration’":

This is the sort of stuff I was thinking about in the intro to March 6's "Michelle Obama's office says the former first lady 'will not be running for president' in 2024":

...On the other hand, I'm not sure you would want to be President during the next four years, there are so many problems that have been growing and metastasizing just beneath the surface of the daily news that the person in the hot seat could end up just plain reviled.

If I were a Democrat strategist I would propose letting Donald Trump win a second term while concentrating on House and especially Senate (to bottle up judicial, including Supreme Court, nominees) races.

A Trump win would give an excuse for riots (for the visuals) and if he is handcuffed by the Legislative branch to limit the range of possible responses, you go beyond polycrisis to the omnicrisis. Throw in a bit of Frances Fox Piven with her "overwhelm the system" and "motor voter" strategies and you could see one-party rule for thirty years....