November 12, 2022 | CPI Report, Job Market, CBDC’s (Central Bank Digital Currency) & Cryptocurrency Balance Sheets

<p>CPI Report The market rallied this morning on news inflation was not as bad as feared. The headline CPI number for October came in at 7.7% compared to last year, which was lower than the estimate of 7.9% and below last month's reading of 8.2%. Back in June the CPI hit 9.1%. I believe some investors believe this number could help lead to a Fed pivot, but I'm still not optimistic given their stance of being strong to fight inflation. With that being said, I believe they should slow down and let these rate hikes and Quantitative Tightening work through the economy. One major factor that I find interesting in the report is that rising shelter costs contributed more than half the monthly gain as it increased 0.8% compared to last month and was up 6.9% compared to last year. This was the highest annual increase since 1982, but one thing to take into consideration is that rising shelter costs don't necessarily have a large impact on the entire population. In fact, with more than 65% of the population owning their home, the monthly expense is much more fixed and shouldn't be subject to the current inflation we are seeing. I hope the Fed takes that into consideration as the report needs to be analyzed in its entirety.</p> <p> </p> <p>Job Market I continue to believe that the feared recession will be mild. I have talked about how the strong job market has continued but one other aspect that is continuing is a lot of liquidity in the economy through what is known as the M2. M2 is a measure of the amount of money that includes currency, deposits, and shares in retail money market mutual funds. Like the job market this is holding strong at just under $22 trillion. Compare that to about three years ago when it was well under $16 trillion. So not only do consumers have a job to provide cash flow but savings accounts are flush with cash to continue to consume.</p> <p> CBDC’s (Central Bank Digital Currency) I have talked in the past about CBDC’s which are known as Central Bank Digital Currency and said that countries are movin