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Updated: Apr 6, 2023

Consumer Prices haven't been this high in 31 years!

The CPI climbed 6.2 percent which is the highest since its 6.3 percent reading in October 1990. The monthly increase in the CPI for October was 0.9 percent while the October 2020 reading was 0.1 percent. And, over the next three months, there will likely be readings of 0.2, 0.2, and 0.3 percent replaced in the trailing twelve-month calculation which suggests that consumer

inflation is likely to remain uncomfortably high. Janet Yellen, the Treasury Secretary, recently said the path of inflation, moving forward, depends on the pandemic, and, how quickly demand

returns to normal. Meanwhile, Fed Chair Powell's reappointment may just be hinging on this unprecedented spike in consumer prices.

Bond yields climbed in the wake of the CPI release while stocks waivered; bonds rose 12 basis points to close at 1.56 percent and, according to the S&P, stocks showed only modest gains. Additionally, the CPI report sparked an increase in the dollar; the DXY index rose from 93.96 to 95.13 at last week's close which was the highest since July 2020. DXY is up on the year by almost 6 percent.

Despite prices, retailers forecast record high holiday spending. This year's record inflation will undoubtedly take a toll on households who spend roughly a third of their earnings on essentials like food and energy. And, to make matters worse, factors, like ocean freight rates, that contribute to higher prices do not seem to be letting up any time soon; in fact, according to Sea-Intelligence, a Copenhagen-based maritime data, and advisory company, container shipping rates may take over two years to normalize.

Note: An index is an unmanaged statistical composite. The S&P 500® Index is an unmanaged index of common stocks used as a general measure of market performance. The index reflects the reinvestment of all distributions and changes in market prices but excludes brokerage

commissions or other fees. It is not possible to invest directly in an index.

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