August 17

8/17 – WEEKLY COMMODITY SUMMARY:

• Last week’s CPI report finally provided a little relief. July’s Consumer Price Index was up just 0.1% from June and is 3.4% above a year ago. Gasoline prices, while down 2.1% from June, are still 24.6% above a year ago, and fuel oil (home heating oil and the same distillate as diesel) is up 39.1%. As long as fuel remains elevated, prices will be amplified at every level of the supply chain.

• Interest rates on car loans, credit cards, and commercial loans are all up this year. Mortgage rates that bottomed just under 6% in Feb were 6.7% last week. Big increases for high profile items like ground beef, coffee, and utilities have consumers particularly upset. According to Gallup, one-third of Americans say they are making sacrifices like skipping meals and driving less – just to pay for medical expenses.

• The Fed left interest rates unchanged two weeks ago. But unless inflation begins to abate, the Fed’s next move will likely be a rate hike.