The first of the July inflation reports over the next week was just released. Import prices fell .6% m/o/m and 3.2% y/o/y vs expectations of up .2% and down 2.5% respectively. Taking out the influence of food and fuels, prices were still down .4% m/o/m but still up .2% y/o/y. Import prices specifically from China fell .2% m/o/m and from the EU by .1%. Bottom line, the moderation we’ve seen in all measures of inflation since March has likely run its course and should start to reverse led by food and energy prices. The CRB index from the Feb peak to the June low was down 18% but has since risen 13% since. The debt delevering induced deflation continues its battle royale against the inflation boosting powers of central bankers.
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