Inflation Refuses to Cooperate as FOMC Meeting Looms
Markets are on edge as inflation refuses to cooperate with central bankers. The Consumer Price Index for August showed a 0.4% increase, beating expectations but still a hot number at 3.4% year-over-year.
The Producer Price Index was even more alarming, with an annualized rate of 5.4%. This trend is putting pressure on CPI and has the potential to continue feeding inflation.
Shipping rates are spiking, diesel fuel prices are rising, and everything that needs to be shipped is getting more expensive. The Federal Reserve's FOMC meeting next week is expected to raise interest rates, but Chairman Kevin Warsh may struggle to get enough votes for a rate hike.
Treasury Secretary Scott Bessent made headlines by claiming 'I am the house now,' as he intervened in the yen market to support its value. However, critics argue that currency interventions are typically only temporary and require fundamental changes in government policies and economic trading to be effective.