It's The Economy Stupid: CPI

Consumer Price Index (Month On Month) -.02% versus economists’ expectations of -0.1%.  The prior period number was +0.2%

Consumer Price Index (Year On Year) 3.6% versus economists’ expectations of 3.6%.  The prior period number was 3.6%

Consumer Price Index Ex Food & Energy (Month On Month) +.03% versus economists’ expectations of +0.2%.  The prior period number was +0.3%

Consumer Price Index Ex Food & Energy (Year On Year) +1.6% versus economists’ expectations of +1.6%.  The prior period number was +1.5%

 

So, there isn’t a whole lot of inflation pressure in the numbers so far.  However let me point this out.  CPI is 3.6%.  The yield on the 3 Month Treasury Bill is .01%.  That is a -3.5% real return after adjusting for inflation.  2 Year Treasuries yield .375% which is a -3.125% real return after adjusting for inflation.  The 5 Year Treasury?  -2.943% real return.  The 10 Year Treasury?  -0.67% real return.   

 

At some point the real return on Treasuries will return to a positive number and I wouldn’t bet on inflation going lower.

 

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury

Ph:  225-342-0013

Fx:  225-342-9721

Email:  jbroussard@treasusry.state.la.us

Street Address:

301 Main Street

Baton Rouge, LA 70802

Mailing Address:

P.O. Box 44154 Capitol Station

Baton Rouge, LA 70804-4154

Physical Location:

One American Place, 7th Floor

Corner of North Street & 4th Street

Exit 1D I-110 North Street / Capitol Park / Downtown