00:00Americans are a little happier than they were, at least according to these preliminary University
00:04of Michigan figures. 54.4 is the sentiment number that's up from 49.5, so back into positive
00:11territory. And one would think that may have a lot to do with gasoline prices these days.
00:15But the one-year Michigan inflation number, which, of course, the Fed is watching closely,
00:19did drop to 4.2 percent from 4.6 percent, a significant drop, but, of course, still well
00:25above the Fed's target. Five- to 10-year inflation, 3.3 percent unchanged from last month. The current
00:32conditions index goes up to 54.9 from 47.7, and expectations go up 54 from 50.7. So, overall,
00:41a little bit more happiness. But, again, these are still very low numbers for this survey overall.
00:46Americans not getting overly enthusiastic about where we are. And, of course, a lot of this may
00:51change since the war has restarted. And, Bonnie, I want to mention just before we go here that
00:56we have had another Fed official get on the record about inflation. Beth Hammock, the Federal Reserve
01:03Bank president of Cleveland, has published a note on LinkedIn this morning saying,
01:08there is no conflict with our mandate. Inflation is too high. The labor market is right around my level
01:15of maximum employment. So, it's beginning to look, when you put her together with Laurie Logan's
01:21comments last night, that the unified Fed that we saw at the last meeting may splinter at the July
01:29meeting, and we may have some dissents if they don't raise rates. Yeah, either splintering or the
01:34message is getting very firmly put out there to markets that, you know, don't take all of these
01:39rate hikes off the table as you did for July, because you just might get one at some point soon.
01:43Michael, we're obviously also potentially going to see CPI data get hotter again with oil prices at
01:50these levels and the war escalating again. Might that happen as soon as next month?
01:55It certainly could, because the oil prices started going up right at the beginning of July and gasoline
02:01prices, they didn't come down as far. So, they've started back up again, and that will show up in CPI.
02:07But even more important, we get the PCE numbers for the month of June on the date of the next
02:13Fed
02:13meeting, and analysts have now figured out between PPI and CPI what they think PCE is going to be,
02:18and they're predicting it's going to rise. We're not going to see the same movement that we saw
02:24in the CPI and PPI dropping a little bit, especially core PCE is going to go up. And that's not
02:31good
02:31news for the Fed, which targets basically PCE and looks at core PCE as the best representation they have
02:37at the moment of inflation.
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