Skip to content

Inflation Watch A mid-month focus on inflation via Traditional Indexes, Commodity Prices, and Labor Costs

May 12 2022

Inflation Still Bad But Base Effect Helped

  • May 12, 2022

The CPI numbers were hotter than expected. Our Scorecard still suggests cost-push inflation continues to have an upper hand in driving inflation higher, an unfavorable scenario for risky assets.

 

Apr 13 2022

Peak Inflation=Peak Rate Hike Pricing (Redux)

  • Apr 13, 2022

The CPI numbers are largely in line. Our Scorecard still suggests high inflation pressure for now, but there are indications that inflation has probably reached a medium-term peak and the pricing for Fed rate hikes will likely come down.

 

Mar 10 2022

Inflation—Russia Ups Inflation Worries

  • Mar 10, 2022

Another month of contemporary record highs for both headline and core inflation readings…and this data does not include the bulk of the oil surge. A surprise boost in commodity prices from the Russian invasion of Ukraine makes Fed Policy an even more delicate balancing act.

Feb 11 2022

Peak Inflation=Peak Rate Hike Pricing

  • Feb 11, 2022

The CPI numbers surpassed already-high expectations. There are reasons to believe inflation has probably peaked and the pricing for Fed rate hikes will likely come down.

 

Jan 13 2022

Inflation—Broad-Based & Less Transitory

  • Jan 13, 2022

The CPI numbers suggest inflation is broad-based and less transitory than expected. Our Scorecard starts to tilt a bit toward a cost-push inflation regime, caution is warranted. Watch the yield curve closely.

 

Dec 10 2021

Inflation—Alarms Ring At The Fed

  • Dec 10, 2021

October and November’s readings both signal that monetary stimulus is now doing more harm than good. The Fed policy pivot from supporting the labor market to fighting inflation has begun. Gains in consumer prices have resulted in a headline CPI value not expected until the middle of 2024 under the pre-pandemic trend.

 

Nov 11 2021

Inflation—Looking Less “Transitory”

  • Nov 11, 2021

The CPI numbers were well above market estimates. The futures market quickly moved on to price in a Fed hike in June 2022. Inflation will persist for a while longer but we refrain from extrapolating the current trajectory too far into the future.

Oct 14 2021

Inflation - All Clear To Taper

  • Oct 14, 2021

The CPI numbers are slightly above market estimates. 
These numbers gave the Fed the “all clear” to taper.
Scorecard still points to higher inflation.

 

Sep 14 2021

Inflation: Signs Of Cooling?

  • Sep 14, 2021

August CPI numbers fell short of expectations with the m/m figures looking surprisingly normal.
The 10-year breakeven rate is four months removed from its high and in a very tight range.
The headline CPI has outstripped median wage gains for the last five months.

Aug 12 2021

Inflation - Still Hot

  • Aug 12, 2021

The CPI numbers are in line with market estimates. These numbers are unlikely to alter the Fed’s view on the upcoming taper. We continue to give the reflation trade the benefit of the doubt.

Jul 14 2021

Inflation—Another Strong Beat

  • Jul 14, 2021

The CPI numbers exceeded the most aggressive market estimates. The bond market’s message is quite clear: the concerns of Fed tightening outweighs inflation. While it’s still debatable whether inflation is “transitory”, the reflation trade still gets the benefit of the doubt. 

 

Jun 10 2021

Inflation—Feeling Hot, Hot, Hot

  • Jun 10, 2021

CPI figures for the last two months have pummeled estimates and set multiyear records. Equity and fixed income markets seem to be comfortable in the Fed’s assessment that these high inflation prints are transitory.

May 13 2021

Inflation—Too Hot?

  • May 13, 2021

The CPI numbers blew past market expectations. Equity investors might feel it’s too hot, as higher inflation has historically been associated with lower equity valuations.

 

Apr 14 2021

Inflation—All About Expectations

  • Apr 14, 2021

The CPI numbers are a tad better than market expectations. Expectations for higher inflation are already quite high and that means simply meeting expectations might not be enough.

 

Mar 11 2021

Inflation Spotty, Not Yet A Problem

  • Mar 11, 2021

The Core CPI numbers were slightly below estimates easing inflation fears. Inflation in the Energy complex has driven headline inflation to a one year high. Readings over the next few months will be distorted as we reach the anniversary of last spring’s collapse.

 

Feb 11 2021

Moderate Inflation—Enjoy It While It Lasts

  • Feb 11, 2021

The Core CPI numbers are slightly below consensus. With equities at extreme valuations, having well-contained inflation is not a bad thing at all. Enjoy the “goldilocks” while it lasts.

 

Jan 14 2021

Blue Sweep + New Fed Regime = Higher Inflation Ahead

  • Jan 14, 2021

The CPI numbers are largely in line with expectations. A blue sweep and a new Fed regime is a powerful combination that should be taken seriously. We now believe the odds of higher inflation are materially better than just a month ago.

 

Dec 11 2020

Inflation Remains Moderate

  • Dec 11, 2020

The CPI numbers are slightly ahead of expectations. The reflation trade and the weaker dollar trade are very popular but they are no no-brainers. Our moderate inflation view is supported by the latest reading of our Inflation Scorecard.

Nov 13 2020

Inflation—Still Moderate

  • Nov 13, 2020

The CPI numbers are slightly below expectations. Positive vaccine news has kept the rotation trade alive. Our moderate inflation view is supported by the latest reading of Inflation Scorecard.

 

Oct 14 2020

Inflation—Calm Before The Blue Wave

  • Oct 14, 2020

The CPI numbers are in line with expectations. The inflation impact of a “blue wave” will be much more significant and the markets are already trying to price that in.