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Macro Since The Jan FOMC: Inflation - Core Goods Deflation Fizzling Out [3/3]

US
  • More broadly, after impressive disinflation last year, the Fed is looking to see service inflation moderate in case the benefit from improved supply chain pressures limits further goods disinflation/deflation.
  • The latter appears to be playing out in recent months, with the NY Fed’s supply chain pressures index moving back to neutral levels after a dropping to historical lows in 1H23 last seen in 2008 and 2001.
  • This has been met by consumer core goods price deflation fizzling out and latest core PPI inflation accelerating with one measure at its highest six -month trend rate in a year.

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