Inflation Watch A mid-month focus on inflation via Traditional Indexes, Commodity Prices, and Labor Costs
Policies Drive Inflation Going Forward
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The latest CPI report was largely in line with consensus. The combination of easy monetary and expansive fiscal policy, from both the U.S. and China, materially raises the risk of higher inflation over the next year.
Inflation—Changes Are Coming
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The latest CPI report was largely in line with consensus. Our scorecard shows the trend of disinflation has stalled.
Inflation—Warmer Prints But Muted Reactions
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The latest CPI report was a tad higher than consensus. Our scorecard shows the trend of disinflation stays intact.
Inflation: Let The Cuts Begin
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August’s Core CPI was a tad hotter than expected, locking in a 25bps cut a week from today. Markets currently forecast 250bps of Fed easing by the end of 2025. We probably won’t see sub-2% inflation rates until the Spring of 2025.
Modest Disinflation Continues
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The latest CPI report was in line with consensus. Our scorecard suggests that the modest disinflationary regime continues.
Modest Disinflation
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The latest CPI report was a tad cooler than consensus. Our scorecard suggests the modest disinflationary regime is likely to persist.
Inflation: Good Times Are Here Again?
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May’s CPI figures were cooler than expected, breaking a trend of generally hotter than anticipated results. Many inflation data series continue to plateau at rates higher the Fed’s comfort zone.
Inflation—Boring Is Good
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The latest CPI report was boring, but no bad surprise is really good news these days. Our scorecard is currently Neutral and it’s likely on the cusp of turning disinflationary over the next few months.
Inflation—Overreacting Much?
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CPI readings were a touch above estimates again in March. The actual data surprises are not nearly as dramatic as the market reactions, which have been almost entirely driven by sentiment swings.
Inflation: A Bumpy Road To 2%
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Like January, February’s CPI figures were hotter than expected. Stickier inflation data, spiking breakeven rates, and fewer Fed cuts haven’t scared the equity market one bit.
Inflation—Above Expectations Again
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CPI readings were a tad hotter than estimates again in January. Given the speed of disinflation that’s currently priced in by the market, we are probably headed toward a period of expectation adjustment.
Inflation—Stickier Than Expected
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CPI readings for December were a tad hotter than estimates. The path forward is unlikely to be a straight line down. Watch geopolitics closely, as it could drive prices in either direction very quickly.
Inflation: What, Me Worry?
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This looks like a market that has made up its mind about inflation and a coming soft landing. Inflation and Economic Surprises in 2023 have helped form this rosy outlook.
Inflation—Softer But Not All Clear
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CPI readings for October were softer than estimates. We caution against linearly extrapolating the current disinflation trend. Our scorecard update shows an uptick in inflation pressures.
Inflation: Higher Rates Help Fed
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CPI readings for September leaned hotter for the headline numbers. Our Inflation Scorecard hints at building price pressures. The Fed’s tightening campaign is currently on hold with the rise in longer term rates.
Inflation Pressures Start To Build Again
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Latest numbers are largely in line with expectations. Higher wages boost the wealth effect, which supports the economy, which also means inflation and rates are likely to stay higher for longer. The latest update of our inflation scorecard shows inflation pressures are starting to build again.
Inflation—Outlook More Muddled Now
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Latest numbers are in line with expectations. There are several indicators that start to paint a more muddled picture on inflation going forward. The latest update of our inflation scorecard shows a Neutral reading of 50.
Inflation—Not A No Brainer Going Forward
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Latest numbers are below expectations. Various leading indicators point to softer CPI prints ahead. The prevailing soft-landing narrative underestimates the chances of inflation staying higher than what is acceptable to the Fed.
Inflation: Looks Like Late Innings
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CPI readings for May were pretty much in-line with consensus estimates. Trends continue to play out as if we’re in the last few innings of rapid YOY price increases. Inflation and a deflating asset bubble have led to atrocious real returns across all asset classes.
Inflation Supports A Fed Pause
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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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