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IPFS News Link • Central Banks/Banking

One Bank's Non-Transitory Inflation Meter Just Hit A New Record High

• https://www.zerohedge.com, by Tyler Durden

Of course, since then it's only gotten worse and the core PCE report released earlier today revealed another explosion in all price pressures, not just transitory, rising to the highest level since 1983.

In other words, persistent (non-transitory) inflation is rising sharply as well. So to get a more complete picture of current inflation dynamics, last month BofA revised its transitory inflation meter with the BofA US Persistent Inflation Meter (PIM), and here, a "surprise": it soared to 75 in June from 37 in May, indicating elevated persistent inflation.

Fast-forward to today when the latest BofA reading of both transitory and persistent inflation meters, showed what everyone already knew: both series hit record highs, with Transitory inflation at the highest possible reading of 100, while the sticky "Persistent" inflation rose from 75 to 90, which while also the highest on record, still has some more upside to go.

As BofA's Alexander Lin explains, the July CPI report showed a cooling off in core inflation with core CPI rising a still elevated 0.3% (0.33% unrounded) mom. Transitory drivers of inflation ebbed as used cars slowed to a 0.2% mom clip and airline fares edged down -0.1% mom. That said, there was strength in new cars, up 1.7% mom, and lodging which spiked 6.0% mom. For more details, see Core CPI cools to 0.3% mom in July. And while transitory inflation cooled on a sequential basis, "it remains elevated on a % yoy basis." As such, the BofA US transitory inflation meter (TIM) remained at 100 for the fourth consecutive month, signaling historically strong transitory inflation.


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