Headline CPI was flat (below the +0.1% consensus) and core CPI inflation was 0.2% (below the +0.3% consensus). Here are some pictures of central tendencies and trends:
figure 1: Title CPI inflation annual rate (blue), core CPI inflation annual rate (tan), trimmed average CPI inflation monthly rate annual rate (tan), CPI median inflation monthly rate annual rate (pink), title CPI Instantaneous, T=12, a=4 per Eeckhout (bold red), all expressed in %. Source: BLS, Federal Reserve Bank of Cleveland via FRED, Bureau of Labor Statisticsand the author’s calculations.
Instantaneous inflation (T=12, a=4) is currently 3.2%. The implied CPI target consistent with 2% PCE inflation is about 2.45% (0.45 is the difference between CPI and PCE inflation during 1986-2019), so instant inflation is about 0.75 percentage points higher than the target.
BLS Super Core The annual growth rate is 2.8%.For everything you want to know about core services (except housing inflation), see Pavel Skorzypczynski’s website. The current annual growth rate is 3.9%.
appendix:
No further interest rate hikes will be considered at the next meeting. From CME Group Fed Watch:
and 10-year Treasury yields from TradingEconomics.
