As is well-known, awhile back our clueless Fed Chairman began claiming that the inflation battle had nearly been won owing to the plunge of his favorite new dashboard indicator---the CPI Services SuperCore. Never mind that it excluded 75% of the weight in the CPI item basket! This drastically truncated version of the inflation ruler had been heading straight south during the first nine months of 2023---so it was heralded as a leading, less noise-ridden indicator of the overall inflation trend.
Not according to this morning's report for March 2024, however. The rising SuperCore trend of the last several months not only continued; it actually went supercritical, rising at a 0.7% M/M rate and +5.0% over prior year.
So standby for a new Powell fiddle of the incoming data, perhaps called the "Core SuperCore", which would also exclude transportation services. The latter sub-index was up at a 18% annual rate in March, but its deletion would bring the measure down to, well, just 18.8% of the actual CPI basket.
At some point, therefore, Powell might as well go whole hog, and exclude 100% of the CPI items. Then he'd have a twofer. He could brag that inflation has been reduced to 0.00%, while complaining that his dashboard is now running 200 basis points below target and that the printing presses must be restarted forthwith!
SuperCore CPI Services, 2017-2024
Then again, we'd suggest it's about time to get real about the Fed's giant and utterly failed experiment in monetary central planning. That is to say, it has long been evident that in the context of an intricately integrated $105 trillion global economy and $425 trillion deep worldwide debt and equity market that rational, effective and activist monetary policy in one country is impossible. The leakage through the four walls of the US economic bathtub and the global cross-currents which assail it are beyond mortal comprehension, make a farce of macroeconomic models and, in any event, are far, far out of the reach of the crude policy execution instruments employed by the Fed and other central banks----interest rate tweaking and persistent large-scale monetization of the public debt.
