MoM metrics declined, especially core PCE:
figure 1: Monthly CPI inflation (blue), PCE inflation (black). The NBER uses shades of grey to define the peak and trough dates of the recession. Source: BLS and BEA, and author’s calculations.
figure 2: Monthly core CPI inflation (blue), core PCE inflation (black). The NBER uses shades of grey to define the peak and trough dates of the recession. Source: BLS and BEA, and author’s calculations.
Part of the result is that the 5-year inflation breakeven point continues to decline.
image 3: 5-year inflation breakeven, 5-year Treasury minus 5-year TIPS (blue, left scale), 5-year breakeven, adjusted for inflation risk and liquidity premium, per DKW (red, left scale), all in % . Source: Treasury via FRED, KWW per DKWand the authors’ calculations.
