Below is a summary of my post-CPI tweets.
OK, 20 minutes to CPI. Let's get started.
Last month there was of course that talk about cell phones, and the jump in core did excite breakevens…a little. 10y breaks now at 2.18%, highest in 4 years. But, as I recently pointed out, You Haven't Missed It.
Consensus expectations this month are for 0.19 on core or a little softer. Y/Y will rise to 2.2% if core m/m is 0.13 or above. Outlier of 0.23 would move us to 2.3% and be a surprise to many.
Average over last 6 months is 2.56% rate. I saw a funny article saying ‘but that's due to cell phones.' Of course, the m/m rate is not due to cell phones dropping off from March of last year. Median CPI is at 2.48%. So this is not the new normal. It's the old normal.
No one is much more bullish than expecting an 0.2% every month…that's a 2.4% annually; most economists see that as something close to the high of sustainable inflation. But again, that's the old normal. It just seems new because it has been a LONG time since we've been higher.
They're wrong on that! Just not sure how soon this all comes through.
So last month, in addition to the bump in core services y/y (because of cell phones), core goods also moved to -0.3% from -0.5% and -0.7% the prior mo. The lagged weakness in the dollar, along with the rise in goods prices caused by trucker shortages, should be showing up here.
Lodging Away from home took a big y/y jump last month, but it's a volatile category with a small weight. It's usually an excuse to people who expected something different on the month.
I continue to watch medical care, which is important in core services. Doctor's services still showing y/y inflation as of last report, but both Doctors Services and Hospital Services rose last mo.
15 minutes until the number!
Buying in the interbank market for the monthly reset (for headline) is 250.68.
Very weak number. 0.10% on core CPI. y/y ticks up only slightly, to 2.12% from 2.11%.
Last 12. Surprising. Note that last April was 0.09% so might be some seasonal issue with April. Sometimes Easter plays havoc, and Easter was early. But that's usually more a Europe thing.
