Free Trial
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
US
- [Follows discussion on labor developments part i and part ii]
- CPI inflation surprised in that it came in very much in line with expectations for once, with core CPI accelerating only modestly in M/M terms in December across major components.
- However, simply removing the possibility that inflation re-accelerated plus some more constructive details within the report helped see a 25bp hike on Feb 1 as almost locked in.
- Specifically, core CPI printed 0.30% M/M after November’s 0.20% as all three major core components (shelter, non-shelter services and goods) accelerated. However, with standout strength in shelter expected to fade mechanically over time as weaker new leases feed through and the other two categories broadly kept to a recent softer trend.
- Digging even further into the details, an unusually strong increase in hospital services (the third strongest since at least 2000) likely temporarily biased non-shelter service inflation, a key segment for the Fed, higher.
- Further, there was sharper progress made on dispersion of inflation pressures, with MNI calculating that the share of the entire CPI basket seeing M/M inflation above 3% annualized in seasonally adjusted terms fell 7pps to 44%, the lowest since January 2021 and close to the 39% average through 2019.
- The Fed is of course ultimately more focused on core PCE, which more recently came in at 0.30% M/M. That’s a solid bounce from the 0.17% M/M in November that had roughly been consistent with the 2% inflation target for the first time since July and before that February 2021. Nevertheless, the trend in core PCE inflation is at least moderating, from 4.7% annualized in Q3 to 3.9% in Q4.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
We are facing technical issues, please contact our team.
ok
Your request was sent sucessfully! Our team will contact you soon.
ok