- Rents make up a disproportionate portion of the CPI and their are disparate stories across the country of landlords gaining the upper hand as more people choose to rent instead of buy.
- The CRB keeps hitting new highs as many commodities are breaking out to multi year highs.
- The dollar has been weakening and import prices have been rising.
- The US is putting real pressure on the Chinese to weaken the yuan.
- Airfares have been rising as the sector has seen consolidation.
Keep An Eye On CPI
If the Fed will indeed engage in QEII, than CPI is now the most important economic release. If CPI does not continue to show very low inflation than the Fed will have a tough time justifying their actions. I see numerous risks to CPI over the coming months: