ISMS 5: How Rising Rates and Oil Prices Are Contributing to 6.4% Inflation in the US

<h2><strong>How rising rates and oil prices are contributing to 6.4% inflation in the US</strong></h2><p><a href="https://myworstinvestmentever.com/getpdf/" rel="noopener noreferrer" target="_blank"><strong>Click here to get the PDF with all charts and graphs</strong></a></p><h3><strong>What do you think: Are we headed for a recession or has the Fed engineered a soft landing?</strong></h3><ul><li>Jan. US CPI was up 6.4% YoY, continuing its slide from the June 2022 9.1% YoY peak, driven by high food and energy-related products</li><li>Food was up 10.1% YoY but continued its 5th straight month of slowdown, driven by food consumed at home was up 11.3%</li><li>The energy component of CPI rose 8.7% YoY; Oil was $100/bbl in Jul-2022; it’s now down to $80bbl. Oil price is the driver; however, energy commodities prices were up only 2.8%, thanks to a slower oil and gas price rise</li><li>All other items excluding food and energy never rose as much and are coming down more slowly. This group benefited from negative used vehicle prices, but shelter costs keep it high</li><li>Over the long term, energy, despite its small weight in CPI, drives consumer prices</li><li>Putin’s invasion of Ukraine was not the primary driver of inflation; instead, it was the oil and gas price rise in 2021 when post gov’t lockdown demand bounced back</li><li>Home prices rose massively thanks to Fed’s nearly-free money, and soon could start contracting</li><li>The oil price fell 6.1% YoY in Jan, down from its Jun-22 high rise of 60.8%; disinflation is in full swing</li><li>Home prices continued slowing from the July 2021 peak YoY change of 18%</li></ul><br/><h3>Key points</h3><ul><li>Jan. US CPI was up 6.4% YoY, continuing its fall from its 9.1% peak in June 2022</li><li>The 6.4% level was kept high mainly by high food and energy prices</li><li>It was a slight YoY slowdown compared to Dec-22, which was 6.5%</li><li>Food was up 10.1% YoY but continued its 5th straight month of decline</li><li>Food peaked in Aug-22 at 11.4%</li><li>The 10.1% food pri