MNI BRIEF: Williams Is Confident Fed Getting Inflation Back To 2%

MNI China Daily Summary: Monday, July 1

MNI BRIEF: PBOC To Borrow CGBs In Response To Market Situation

MNI BRIEF: Caixin June Manufacturing PMI Hits Three-year High

MNI: PBOC Net Drains CNY48 Bln Via OMO Mon; Rates Unchanged

Bundesbank SA Suggests Core / Services Momentum Slowing

EZ/UK Bond Supply Calendar: UK, Germany Auction on Tuesday

EZ/UK T-Bill Calendar: Spain, Belgium, ESM Auction on Wednesday

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Multivariate Core Trend Inflation Falls To Post-2020 Low

US INFLATION
DataHomepagemarkets-real-timeData BulletBulletMarketsFixed Income BulletsForeign Exchange Bullets

The New York Fed's modelled estimate of Multivariate Core Trend (MCT) inflation ticked lower to 2.36% in May from 2.51% in April.

  • As the Bank's researchers note, that's 0.56ppts above the pre-pandemic average, with that figure in turn roughly split between housing and services-ex housing (goods were slightly negative). The 0.56pp differential is the lowest since December 2020 (see chart below of normalized readings).
  • The MCT has mostly undershot core PCE since early 2023, and offers some comfort to policymakers that underlying price dynamics remain in a disinflationary trend.
  • Per the NY Fed, the MCT model "measures inflation’s persistence in the seventeen core sectors of the personal consumption expenditures (PCE) price index...[whereas core PCE] simply removes the volatile food and energy components...The MCT model seeks to further remove the transitory variation from the core sectoral inflation rates. This has been key in understanding inflation developments in recent years because, during the pandemic, many core sectors (motor vehicles and furniture, for example) were hit by unusually large transitory shocks. An ideal measure of inflation persistence should filter those out."

Source: NY Fed


193 words

To read the full story

Close

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.

The New York Fed's modelled estimate of Multivariate Core Trend (MCT) inflation ticked lower to 2.36% in May from 2.51% in April.

  • As the Bank's researchers note, that's 0.56ppts above the pre-pandemic average, with that figure in turn roughly split between housing and services-ex housing (goods were slightly negative). The 0.56pp differential is the lowest since December 2020 (see chart below of normalized readings).
  • The MCT has mostly undershot core PCE since early 2023, and offers some comfort to policymakers that underlying price dynamics remain in a disinflationary trend.
  • Per the NY Fed, the MCT model "measures inflation’s persistence in the seventeen core sectors of the personal consumption expenditures (PCE) price index...[whereas core PCE] simply removes the volatile food and energy components...The MCT model seeks to further remove the transitory variation from the core sectoral inflation rates. This has been key in understanding inflation developments in recent years because, during the pandemic, many core sectors (motor vehicles and furniture, for example) were hit by unusually large transitory shocks. An ideal measure of inflation persistence should filter those out."

Source: NY Fed