• Notes from The Desk | US CPI - Faint Progress April 12 2023

Notes from The Desk | US CPI – Faint Progress April 12 2023

Notes From the Desk – US CPI – Faint Progress

US March inflation points to a slight moderation in price pressures.

 

  • YoY headline CPI 5% vs 5.1% expected.
  • YoY core CPI 5.6% vs 5.6% expected.

 

Consumers are getting some relief on food and energy costs, but service prices remain stubbornly high.

Today’s data also showed further signs of disinflation in the goods sector.


Implications.

 

  • The core CPI number supports a Fed hike in May, but it remains too close to call, as it will also depend on how they view the situation with the regional banks.
  • For the most part, the bond market is not overly focused on the May meeting, as investors remain preoccupied with when the rate cuts will begin.
  • Treasury yields have moved lower this morning, as traders become more comfortable that the Fed begins an aggressive easing cycle within a few months.
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