CPI - Consumer Price Index, an accepted measurement of inflation.
When the Fed Funds rate is below the CPI rate (Below zero on the chart) inflation tends to run. When the Fed Funds is above the CPI, (Above zero on the chart) the Fed is fighting inflation.
So either the Fed is about to raise rates tremendously to fight inflation, or they are standing by and letting inflation run. We are betting on the latter.
chart
When the Fed Funds rate is below the CPI rate (Below zero on the chart) inflation tends to run. When the Fed Funds is above the CPI, (Above zero on the chart) the Fed is fighting inflation.
So either the Fed is about to raise rates tremendously to fight inflation, or they are standing by and letting inflation run. We are betting on the latter.
chart
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