The latest consumer price index (CPI) numbers were released, showing a slight uptick in August.  The CPI was up 0.2% in August, and it is up 1.1% from last year.

However, the all-important median CPI, which does not get a lot of attention, came in at 2.6% from last year.  This was the second month in a row at 2.6%.

To be sure, these are not big changes.  But the government’s statistics here are indicating a slight uptick.  And it is the trend we are looking for, because we know the overall rates are inaccurate.

The Fed ended its last round of monetary inflation (QE3) in October 2014.  It has been almost two years of a relatively flat monetary base.  Yet, consumer prices continue to move upwards, even if slightly.  This means that some of the Fed’s huge monetary inflation from 2008 to 2014 is still leaking out.

We have seen the price of oil come crashing down in the last couple of years, but that is the only major asset bubble that has crashed.  I don’t count the precious metals in here (silver and gold in particular) because they moved down several years ago, when the Fed was still inflating rapidly.

Is it possible that not everything will come crashing down at once?  Maybe it is possible that we could have a major correction in stocks without seeing the whole economy implode.  I don’t think this is likely, but it is possible.

The Fed likes its position right now because the consequences of its previous monetary inflation are not evident.  There are severe consequences in the form of misallocated resources, but they are not apparent in significantly higher consumer prices.

I have no idea what the Fed will do in its upcoming meeting on Wednesday.  The market really has no idea either.  It is almost a 50/50 bet at this point, which is rare going into a meeting.

If I had to guess, I don’t think the Fed will raise its target rate.  Call it an insurance policy against a Donald Trump presidency.  But we really can’t be sure.  You will want to pay attention on Wednesday afternoon.