67 Months of Inflation and the Fed Still Wants a Gold Star for Showing Up

Hotter Than Expected. Worse Than Reported.

The CPI came in hotter than expected, and I’m going to go a step further and say the real damage is probably worse than what they’re printing. There is always a little home team advantage baked into these government inflation reports. Always. Core inflation has been running well above 3% for three consecutive months now. Wage growth is sitting at 3%. Inflation is at 3.7%. You do not need a finance degree to understand what that math means for your wallet.

This is a treadmill that keeps accelerating. Every month you think you might catch your breath and every month the belt speeds up a little more. And the compounding nature of this is what really grinds people down over time.

The Year-Over-Year Damage Report

Let me give it to you straight from the report:

• Fuel oil: up 74%
• Gasoline: up 34%
• Gas utilities: up 5%
• Electricity: up 4.4%
• Food away from home: up 3.5%
• Apparel: up 3.4%
• Shelter: up 3.2%
• Medical care: up 2.5%
• Used cars: the only category in the green year over year

One category. One. That is your consolation prize after years of being told inflation was transitory, under control, and practically solved.

The Diesel Story Nobody Wants to Tell You

Here is what keeps me up at night about where this is going. Diesel has not yet fully filtered through the supply chain. When it does, and it will, these numbers are going to look worse. Diesel is not just fuel for trucks. It is the engine of the entire economy. Agriculture, manufacturing, retail distribution. All of it runs on diesel.

I saw some excitement about a potential Russia diesel deal floating around. Let me save you the false hope. The total volume being discussed was approximately two weeks of U.S. supply. Two weeks. And it was never even coming here directly. The plan was to dump it on the global market. Trying to cool diesel prices with that amount of supply is like trying to empty the ocean with a tablespoon. It was theater. It was a fugazi. And the people who reported it as meaningful relief should be embarrassed.

67 Months. What Exactly Do You Do Here?

You know the scene in Office Space where the consultants ask the question, “What exactly would you say you do here?” I have that same question for the Federal Reserve right now.

We are at 67 months of elevated inflation. Sixty-seven months. The Fed’s primary mandate, the one thing they were built to do, is manage inflation. Not babysit employment numbers. Not prop up GDP growth. Inflation. And yet here we are with core inflation stubbornly above 3% and the Fed still playing the “we’re monitoring the situation” game.

The American consumer has been on that accelerating treadmill for nearly six years while the institution specifically designed to slow it down has been asleep at the switch.

Compounding Against You Is a Slow Financial Emergency

I preach about the power of compounding because when it works for you, it is the single greatest wealth-building tool available. But compounding is completely indifferent to whose side it is on. When prices compound upward faster than your income compounds upward, the gap widens every single year. It is not a wash. You are not running in place. You are losing ground, and the further you get behind, the harder it becomes to close that gap.

This is the real story of the inflation era. Not the monthly CPI print. The cumulative, compounding destruction of purchasing power that does not show up in a single headline but shows up every single time you open your wallet.