We seen this coming, and the news keeps getting worse.
Gas is $5 a gallon, 10 year old Honda Civics cost $20k, suburban middle class homes cost half a mil and rent is $2,000 a month.
The consumer price index (CPI), the most widely tracked benchmark for inflation, rose 8.6% on a year-over-year basis in May, topping expectations that it would decline to 8.2% from April’s 8.3%. The core CPI – which strips out food and energy costs – rose 6% year-over-year in May, dipping from April’s 6.2%, but more than expectations for 5.9%.
On a monthly basis, the CPI rose 1% in May, ahead of expectations for a gain of 0.7%, and more than tripling from April’s 0.3% advance. The core rate rose 0.6% in May, flat from April, but higher than expectations for 0.5%.
The unexpected fresh four-decade high of 8.6% in headline inflation is problematic for monetary policymakers who are in the middle of a rate hike cycle, but may have been eyeing a pause at some point later this year. Now the question may be whether the Fed needs to raise rates by 75 basis points per meeting, rather than the planned 50 basis points.
Inflation is actually a tax on the working class. The Government has to print more money essentially devaluing what you earn even more.