Scotiabank: US CPI Likely Ends Biden's Stimulus Quest

Scotiabank see the Dec dot plot pulling forward the first rate hike to 2022 and further troubles for Biden's fiscal stimulus plans after the October CPI report.

• CPI inflation soared in October as every measure exceeded every economist's expectations, including their own.
• Breadth of inflationary pressure was very high. "When it's your home(s), vehicle(s) and food that are all contributing toward higher prices, then it's pretty dang clear that this isn't just a series of distortions and one-off effects".
• "Central bankers—perhaps especially Chair Powell—–have seriously misjudged the breadth and durability of inflation."
• "The December FOMC meeting is likely to see the dot plot pull forward the first hike into 2022. While the FOMC has pre-committed to the taper path in December, inflation and nonfarm readings like we've received may also indicate a bias on the committee toward expediting tapering over 2022H1 at the same meeting."
• Senator Manchin is unlikely to support further fiscal stimulus judging by his tweet that "inflation is not transitory, is getting worse and that "DC can no longer ignore" the inflation tax".