September CPI came in hotter than expected. Headline inflation ticked up to 3.7% year-over-year versus the 3.6% estimate. Core inflation rose to 2.6%, also above the 2.5% forecast.
The trend isn't your friend here. Both measures moved in the wrong direction. Core inflation especially matters because it strips out the noise from food and energy prices.
Markets hate surprises. This one reminds us that the last mile of disinflation is the hardest. Central banks know it. Bond traders know it. Now everyone else is being reminded too.
Don't expect rate cuts anytime soon when the data keeps pushing back.
The trend isn't your friend here. Both measures moved in the wrong direction. Core inflation especially matters because it strips out the noise from food and energy prices.
Markets hate surprises. This one reminds us that the last mile of disinflation is the hardest. Central banks know it. Bond traders know it. Now everyone else is being reminded too.
Don't expect rate cuts anytime soon when the data keeps pushing back.