The February CPI Inflation Rate continues the disinflationary trend, but…
There always seems to be a “but”, doesn’t there?
You can click the MSM’s graphic to read the details about the February Inflation Rate.
The “But”
Now of course the tariffs on, tariffs off/wax on, wax off routine is going to play into this as a spanner in the works. But left to its own devices, the economic picture has been cooling and with it, the inflationary effects of the combined Fed and government efforts in 2020 to create an inflationary economic bailout continued to fade in February.
My question at this time? A very contrarian descent from happy disinflation to liquidity crises and deflation scare… or the dreaded Stag? Before the Trump tariff circus, I was squarely in the “disinflation to liquidity crisis” camp.
Stagflation would see economic deceleration continue while prices generally rise. I am not going to chase Trump policy (and its global tariff policy knock-on effects) around, making claims to know how it is going to shake out. But one claim I will make is that either way, it’s not going to be good. That’s the claim I’ve had for 2025, ultimately, all along.
In the least surprising news of the day, the ES is trying to rally in pre-market, as per its oversold condition. Here is the 1-day chart.
There is plenty of scope for market bulling in the near-term, after the sentiment hammering and oversold conditions that have taken place over the last couple of weeks.
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