Schaftlein Report | June Consumer Price Index increases 9.1% year over year

Guest – Dr. Michael Busler
Finance Professor Stockton University

Headline –

1) Dr. Busler gives his insight on how we got here. Have we reached peak Inflation as commodity prices have fallen significantly?

1A) Consumers expect Inflation of 6.8% one year from now and 3.6% in three years.

2) We have an Inverted Yield Curve with a 2 year / 10 year spread at – .177 basis points with the 2 year note at 3.122 and the 10 year Note at 2.945.
the spread doubled today from .085 yesterday. We’ll discuss the implications and what it means.

2A The dollar continues strengthening as rates rise. Will the Euro go lower against the dollar now that we are at parity?
Multinational companies most effected.

3) Oil is below $98 per barrel. Why?
Producers are producing near capacity and there is a slowdown in demand primarily through China.

4) Builders are slashing home prices and slowing construction as buyers pull back.
Home price increases slowed slightly in April year over year to 20.4% and further slowed in May. June may be the first month post peak with prices actually dip month over month.
June actual sales of homes are down 31% year over year. Cancellations have jumped and in some areas ‘sales have fallen off a cliff” according to local Realtors.

5) Small business sentiment has plunged to a 48 year low as Inflation is the biggest concern by far.

6) Giant tech companies Alphabet and Microsoft and slowing hiring or marginally reducing staff.

7) Why do we still have 11M job openings?

8) Why is Treasury Secretary Janet Yellen in Asia ginning up support for a cap on Russian oil prices? Aren’t the risks much greater than the potential reward?
How would this work in theory? Sanctions on Russia have had only nominal success.

9) What effect is the Crypto collapse having on the over all economy. Founders of Crypto firm 3AC are missing and the company is in bankruptcy.
They had $10B in Assets under management in March.