MATASII INFLATION WATCH

CONCLUSION
The Fed is behind the curve on Inflation and presumably knows this. They are likely highly aware of the potential for a Recession in early in 2019. As a consequence they appear to feel they should error on being aggressive regarding rate hikes so they have more "ammo" available to fight the recession. Historically this has taken 4-5 % cuts in the Fed Funds Rate.  3% appears to be the target they are after with them currently at  1.75%.
The issue is that aggressive rate hikes might be the driver that ensures the recession!

At MATASII we are presently very focused on Inflation & Yield expectations  to best determine where we are in the Credit Cycle reversal road map
PCE:                                                       1.8%
CPI                                                         2.4%
       Core PCE                                               2.8%   (Fed Target 2%)
UIG                                                        3.14
ShadowStats (1990 Benchmark)     6.0%
ShadowStats (1980 Benchmark)   10.0%
PCE

2

CPI

UIG
SHADOWSTATS - 1990 BASIS
SHADOWSTATS - 1980 BASIS