When looking at inflation, the Fed doesn’t much like the mainstream CPI statistics; instead, it prefers the Personal Consumption Expenditures index (PCE). April’s numbers just came out yesterday, see below. It’s the highest monthly reading in ten years.
PCE Inflation Running Super Hot
The Fed keeps on claiming that this is temporary and will go away soon. Further, it says it’s all due to “supply chain disruptions” due to COVID. Really??? How the heck are soybeans impacted, or lumber, or iron ore (China is importing the stuff heavily once again, even at record prices). There is no supply disruption, obviously. It’s just that those many, many more dollars it created are chasing a finite supply of “stuff”. It’s as simple as that...
Iron Ore Prices At All Time Highs
The cost of shipping all this very expensive iron ore to China is also going through the roof - Capesize charter rates have doubled.