Has disinflation story changed?
This article is continuation of my last week’s article which contemplated whether inflation has become a problem for the Fed and also contains my Jan PCE (core and headline, 2nd decimal) estimate. If you haven’t read it yet, I suggest you read it before we continue. You can find the article here:
Has inflation become a problem for the Fed?
Jan CPI came hotter than the market expected with headline at +3.1% YoY (down from +3.4% in Dec) and core at +3.9% YoY (little changed from +3.9% in Dec) but the details were actually not that hot. For more about Jan CPI, make sure to check my CPI thread on X
There are many inflation hawks lately.
argues that BTC is sounding the alarm on the inflation.
This comes after some others like
argued that inflation is not under control:
Jim Bianco of Bianco Research argues that inflation has actually bottomed out around 3%, it’s going to be more “sticky” and Powell will actually have a problem with that.
If you still haven’t, you can check some of my responses to Jim’s arguments.
Jim also argues that Powell will not cut rates when CPI is around 3%.
This is likely not true. Here is why…
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