Thursday, May 10, 2018

April 2018 CPI

The pattern is maintained this month.  Non-shelter core inflation was negative for the month, but the month that dropped off also had a negative reading, so trailing 12 month non-shelter core inflation remained about where it had been last month.  Core CPI inflation is 2.1%.  Shelter inflation is 3.4%. Non-shelter core is 1.2%.

There is little change in the Fed Funds futures market, but market expectations are below the Fed's stated expectations, so maybe this moves Fed policy down toward the market expectation.  It's been nice hearing some noise from the Fed about letting inflation move both above and below the target rate.  But, I still suspect that rate hikes will continue apace as long as core inflation remains near 2%.

1 comment:

  1. "Non-shelter core is 1.2%"--KE

    This is what is so nettling:

    It is not that macroeconomic umpires are wrong or right---it is that they are not even in the ballpark!

    So, non-shelter core is at 1.2%. Gee, I suspect America's "inflation problem" has a lot to do with housing.

    But we have (the Fed informs us with every Beige Book) "labor shortages."

    Left-wingers say we need a higher minimum wage.

    Ironically, raising interest rates might even shrink housing production, though I suspect any permitted along the West Coast will get built, barring a (losing) nuclear war.