The fed cares about core CPI, PCE, trimmed mean etc.
What the fed is generally looking to do is remove most volatile (anomalous) numbers from inflation data to determine how broad/sticky it is.
Core CPI moving up is more concerning, than CPI declining is beneficial.
While headline is generally all that matters to markets short term there was also some seasonal adjustment wizardry. Have a look at gas and used car prices non seasoanly adjusted. Compare this to used car wholesale index (which leads consumer 3-4, months) and average gas price data trends.
Wage inflation has cooled some but labour market still too tight to see it get from 5-6% down to 2% with inflation continuing to run at 5%. Workers have the ability in this labour market to demand and get inflation adjusted wage increases.
Add on top of this the new oil spike this month with opec cuts.
March was the bottom for CPI in this downleg.
February was the bottom for core CPI in this downleg.
Markets are forward looking. Liquidity is getting worse as TGA needs 0. Debt ceiling talks are on deck next.
People/consumers care about CPI
The fed cares about core CPI, PCE, trimmed mean etc.
What the fed is generally looking to do is remove most volatile (anomalous) numbers from inflation data to determine how broad/sticky it is.
Core CPI moving up is more concerning, than CPI declining is beneficial.
While headline is generally all that matters to markets short term there was also some seasonal adjustment wizardry. Have a look at gas and used car prices non seasoanly adjusted. Compare this to used car wholesale index (which leads consumer 3-4, months) and average gas price data trends.
Wage inflation has cooled some but labour market still too tight to see it get from 5-6% down to 2% with inflation continuing to run at 5%. Workers have the ability in this labour market to demand and get inflation adjusted wage increases.
Add on top of this the new oil spike this month with opec cuts.
March was the bottom for CPI in this downleg.
February was the bottom for core CPI in this downleg.
Markets are forward looking. Liquidity is getting worse as TGA needs 0. Debt ceiling talks are on deck next.