M/M core CPI inflation surprised to the upside (0.5pp vs Bloomberg consensus 0.4pp), while m/m headlined consensus. Futures indicated little change in the path of federal funds.
figure 1: Effective Fed Funds (black) as of 3/13 12:20CT (red squares), as of 3/10 (pink squares), as of 3/14 1:20CT, implied by CME futures. source: CME Group Fed Watchaccessed March 13, March 14.
It’s hard to see an increase, but it’s there; for the May 3rd meeting, the implied rate rose from 4.936% to 4.940%.
Here is an annualized graph of the inflation metrics by month: headline, core, core refuge, trimmed mean, and median.
figure 2: Headline CPI (black), core CPI (tan), core ex-shelter (sky blue), 16% adjusted CPI inflation (green), median CPI (red) month-over-month annualized inflation, all as decimals (ie, 0.05 means 5%). Sources: BLS, BEA, Cleveland Fed via FRED, Pavel Skrzypzynskiand the authors’ calculations.
