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Desk Notes

CPI Recap

On track for slower inflation

MR Wahdy

Nov 14, 2023

US inflation data came in soft today, with headline and core CPI missing consensus estimates. Core came in at 0.2% MoM driven by lower auto prices and cooler shelter inflation.

Key takeaways

Lower auto prices helped keep inflation low last month — excluding car prices, core goods were nearly unch MoM
Shelter inflation, which surprised economists last month, seems to have reverted back to trend (and should continue to slow given the lagged nature of OER)
Transportation services rose MoM despite falling airfare

Cross-Asset Impact

Bond yields being bid — Bofa (Mark Cabana) notes that this CPI print means no more Fed hikes. Equity futures are up over 1% on Nasdaq and S&P 500.

In the commodity space, there’s a small rally with metals and crude up.

Impact to View

Coming into Q4, we expected the path of data to come in weaker as the initial wave of fiscal spending (IRA and other initiatives) and stealth easing (regional bank crisis) faded. We remain on-track for our outlook.