Inflation fears are surging once again, sending tremors through the financial landscape. The latest University of Michigan consumer survey reveals that Americans’ inflation expectations leaped a full percentage point to 4.3% in February—the highest level since November 2023. This sharp rise marks only the fifth time in 14 years that expectations have escalated so aggressively in a single month, a stark signal that economic pressures are mounting.
Baltimore is already feeling the squeeze. In Fells Point, four restaurants have shuttered their doors since the start of the year, a casualty of food prices that have soared to 30% above pre-pandemic levels. Rising labor costs are compounding the crisis, as inflation relentlessly erodes every sector it touches.
Inflation is a relentless force—a predator that must be confronted with high interest rates and severe cuts in government spending. Anything less is simply unacceptable.
Attention now turns to the upcoming week of major economic events:
- Wednesday: CPI data is set to drop
- Thursday: PPI figures will be released
- Friday: Retail sales reports hit the market
Early technical indicators suggest that the CPI is poised to deliver a significant shock to the markets. Two-year notes, among the most sensitive to inflation data, are forming a bull flag on daily charts and a weekly hangman pattern hinting at an imminent upward surge.
next week major event:
CPI Wed.
PPI Thursday
retail sales Friday.just did some charting. oh boy. I see CPI is going to have some pain for the market.
2years is the most sensitive to inflation data, now is forming a bull flag, daily reversal, weekly hangman. It wants to go… pic.twitter.com/C78bnWD6u8
— Linda Tang (@LindaTangUSA) February 8, 2025
Peter Schiff warns,
“The yield on the 10-year JGB is 1.3%, a 15-year high. Given that inflation in Japan was 3.6% last year and is likely headed much higher this year, that yield could easily double in 2025. This is a financial crisis in the making that will likely be worse in the U.S. than in Japan.”
The economic storm is gathering strength, and the coming days could deliver seismic shifts that redefine the financial landscape. The pressing question remains: is the economy prepared to navigate this mounting turbulence?
