Warning: an Inflationary Shock is Coming... and the Fed Knows It

By Graham Summers

Over the weekend, the Cleveland Fed released its media Consumer Price Index (CPI) data for December 2017.

The result? The Median CPI rose 0.3% in December, an annualized rate of 3.5%.

Put simply, core inflation is rising rapidly... and the Fed is WAY behind the curve.

Small wonder the US Dollar is collapsing, breaking through critical resistance.

The BIG PICTURE chart is even uglier, suggesting the $USD is going to crash to the mid-80s soon.

Put simply, the $USD is forecasting a SEVERE inflationary shock is coming shortly.

And it's going to blow up the EVERYTHING bubble.

As I explain in my bestselling book The Everything Bubble: the Endgame For Central Bank Policy, sovereign bonds trade based on inflation expectations.

Put simply, when inflation spikes higher, so do bond yields.

When bond yields rise, bond prices fall.

When bond prices fall, the Bond Bubble bursts.

When the Bond Bubble bursts, the EVERYTHING bubble follows. And with median CPI already clocking in at an annualized pace of 3.5%, it's only a matter of time before bonds adjust.

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research