Everything from wages to used car prices could jump higher, market researcher Jim Bianco warns

Jim Bianco said that Washington's efforts to curb inflation will fall short this year.

He thinks this week's key inflation data will prove it.

The inflation rate will not be reduced by anything. The president of Bianco Research said on Monday that there are some things that could reduce the price of prescription drugs. Is that enough to bring down the Communist Party? Is it possible that we will be able to start pricing that in? I don't believe in that.

The consumer price index for July will be released on Wednesday. The number is expected to come in at 8.7%. Energy and food are included in the headline number. The producer price index will be released on Thursday.

Peak inflation may still be ahead, according to Bianco.

There is inflation. Is it going to go up? It's probably not. He said it could be in a 4%, 5% or 6% range. That means what? If inflation is going to settle, we need a funds rate of at least 5%.

Bianco says there is no immediate solution. As long as wages keep rising, he warns inflation will keep rising.

According to the report on Friday, wage inflation is at 5.2% year-to-year. 5% inflation is possible if we have 5% wages. It won't go below wages. Wages need to be 2% in order to get inflation down to 2%.

The prices of used cars are a major example of inflation. He thinks high sticker prices won't budge for months because of demand, supply chain issues and chip shortages.

Bianco said that if you don't pay extra for that car, you're going to have to walk.

The average price for a used car has gone up over the past 90 days and is now $30,866.

He said that used car prices in the last 18 months have been better than Cryptocurrencies.

The Inflation Reduction Act was passed by the Senate over the weekend.

Bianco said that a lot of the stuff doesn't kick in for another few years. In a world where we want to know what the Fed is going to do in September and when inflation is going to peak, those are the stories of the day. The markets are going to remain dominated by those.

The legislation is going to be voted on by the House.