The Quitto Index recognized high inflation in the U.S. in 2021, more than a year before the Federal Reserve and U.S. policy makers. In the Summer of 2022, Treasury Secretary Janet Yellen conceded that monetary policy makers figured out inflation was an issue a little too late:
On January 22, 2021 Dream Holdings started shorting the U.S. economy and published the trade (January 2021 the Quitto Index Reading: 48.74). Dream Holdings research unit realized that, based on their models, the market was not acting rationally due to inflation, and the Quitto Index confirmed this hypothesis.
The Quitto Index
The Quitto Index is an economic indicator that tracks the monthly change of the buying power of the Base Consumer in the United States. The index represents the common behavior of series covering base consumer behavior, the labor market, and consumption. It evaluates data in markets with in-depth research, powerful analytics, and economic tools which translates into one fully integrated product.
The Quitto Index formula was developed in the late 2010s by financial historian Matthew Quitto II, and employs algorithmic data in order to assess and complete the complex index models utilized by Dream Holdings research unit. The firm’s trading strategy is contingent on this intelligence. The formulas monthly readings are based on a scale of 0 to 100.
C = Base Consumer
S = Stress
E = Expectations
T = Time
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About the Quitto Index
The index is updated on the 15th of every month at 4:00 p.m. ET. When federal holidays occur on a publishing date or change the release schedule for the underlying data, the publication schedule may change slightly. The Quitto Index is not an official forecast of, the Federal Reserve System, or the Federal Open Market Committee. The Quitto Index is a product of Dream Holdings LLC.
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