Inflation Road Less Bumpy Than Meets The Eye

I keep hearing all this misinformation that this was a broadly based CPI report, and nothing could have been further from the truth

Well, let me first discuss the misperceptions around last week’s CPI report because the move we saw in Treasury yields in the immediate aftermath was a 3 standard deviation event. We have not seen such a reaction to any such piece of data since June 2022, when the headline was +1.2% MoM and +0.7% on the core and the Fed was in full-bore tightening mode. So, it was a complete overreaction to a report where the headline and core barely missed coming in line with the +0.3% consensus estimate.