Research.LeutholdGroup

Latest numbers support a Fed pause. We believe the 25 bps rate hike in May was the last one of the current tightening cycle. Our Scorecard suggests that the disinflationary force has the upper hand and the impact of credit tightening has yet to show up.

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Latest numbers are unlikely to impact the Fed’s upcoming rate hike decision in May. The China reopening theme is holding up but the inflationary impulse is still missing. Our Scorecard suggests that the disinflationary force is getting a bit stronger, but the overall inflation picture remains quite muddled.

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CPI readings for February were in-line with consensus estimates. Attention has been and will continue to be focused on banks and credit markets for investors and the Fed in the coming weeks. The Shelter Index made a fresh YOY high despite almost a year of declining YOY rent prices.

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Both the headline and Core CPI were largely in line with expectations. The dollar’s recent weakness has served to support higher inflation as well as easier financial conditions. Our Scorecard suggests that the possibility of inflation staying persistently high is increasing.

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Both the headline and Core CPI were in line with expectations.
Sticky ex-Shelter CPI has rolled over and EM inflation surprises are negative now.
Disinflation remains the dominant theme but some inflationary pressure can be quite sticky.

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Both the headline and Core CPI were weaker than expected. Wealth effect and employment indicators also suggest lower inflation. Inflation pressure should ease further as recession becomes the dominant concern.

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Lower than expected CPI figures give the Fed an opportunity to ease the pace of tightening. Markets, probably bracing for yet another higher than expected reading, shoot higher. Our Scorecard sees inflation’s downward trajectory continuing.

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Both the headline and Core CPI are a tad hotter than expected. While shelter contributed the bulk of the upside surprise, it’s set to slow in the coming months. Our Scorecard indicates that inflation pressure should begin to ease a bit fairly soon.

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The CPI figures were hotter than expected and point to more Fed intervention. Barring a 2020 collapse in the price index, year-over-year figures are going to remain high for quite some time.  

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Both the headline and core CPI are better (lower) than expected. We see more signs of peak inflation as oil prices, supply chain issues, wage pressure and capacity utilization start to moderate.

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While the non-seasonally adjusted headline CPI  made a new cycle high with a 9.1% year/year print, which is also the highest since 1981, the Core CPI continues to ease. 

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The CPI figures were hotter than expected and point to more Fed intervention. The most careful consumers and lower-income households are getting slammed in categories of spending we would classify as unavoidable.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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

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