Prepare for a Springtime CPI Collapse

Annualized inflation growth is on the verge of falling apart…

Early in my career, I was fortunate enough to work with some very sharp people. The firm I worked for had hired a team from one of the oldest investment banks in the country. Many of these people had spent much of their careers working for the same firm. But the company had sold itself to a foreign entity and they were moving headquarters somewhere else. So, when they joined my firm, they brought generations of passed-down business wisdom with them.

It was such a successful investment bank because it made sure the people who worked there employed best practices in everything they did. One of those habits was always being proactive instead of being reactive. The employees challenged each other to act and think about where the environment was headed. That way, they were always prepared for any challenge that lay ahead.

And the longer I spent working with the group, the more I saw these habits pay off. The research analysts, salespeople, and traders always seemed to be a step ahead of the market. Because they spent so much time studying, analyzing, and understanding, they were better able to help their clients prepare for every environment. And in the process, they made complicated situations seem routine.

Recently, I’ve been reminded of those habits I learned and now employ. Yesterday, the talking heads in the financial media were in a panic about the December consumer price index (“CPI”) data from the U.S. Bureau of Labor Statistics (“BLS”). Some of the commentators on CNBC labeled the increase in annualized growth a disaster.

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