CPI offers small victory in stability

Monthly Consumer Price Index (CPI) numbers were released Wednesday. April CPI rose 0.3% below estimates of 0.4% with annual CPI at 3.4%, down from 3.5% last month. Core CPI (all items less food and energy) rose the same 0.3% last month, bringing the annual Core CPI to 3.6%, down from 3.8% last month.

Tracking inflation and interest rates is a turtle race most of the time that is best to let run for months on end before worrying about the leaderboard. Since May of last year, annual CPI has ranged from 3% to 4%. The good news is seeing stability after the volatile movement from 2020 to 2023. The bad news is that 3-4% is not the agreed upon goal of 2% or lower that history and the FED have set.

The current FED interest rate sits at 5.25%-5.5% and has been there since last July. The stock market and the economy appear healthy enough for now. There are concerns, of which I have a few, but there are always concerns and if there weren’t you should be even more concerned.

Taking a basic survey of the situation, it appears the FED’s plan of action is simple. Until 2% or close to annual inflation is achieved, interest rates should stay put. If annual inflation climbs above 4%, raising rates will have to be considered. A second round of inflation will not be acceptable.

Hi Ho Silver

If you’ve been waiting to cash in on your silver stash you may want to do a quick inventory as front month silver futures made new highs near $30.50/ounce – prices not seen since February of 2013. Not a bad return if you purchased anytime between 2015 and 2020 but if you bought in January of 1980, you’re still waiting to see positive gains.