Jun 2024 CPI Estimate
Thursday at 8:30 am ET we will get the long-awaited Jun CPI. CPI is the most important macro print this week and this month. Powell said the Fed is looking for more good inflation data now that their dual-mandate risks are more balanced in order to strengthen confidence that inflation is moving back to 2% sustainably. Therefore, this month’s CPI could be crucial for determining Fed’s actions going forward.
So far in 2024 CPI figures have been all over the place. In Q1 CPI was hotter than expected, in Apr it was in line with expectations, and in May it came in cooler than expected. Q1 this year came after quite tame reads in Q4 2023. On average, headline CPI in the first 5 months of 2024 printed +0.1 pp above its Q4 2024 MoM figures.
On average, core CPI in the first 5 months of 2024 printed largely in line with Q4 MoM figures.
My average error for estimating headline CPI went even lower from -2 bps to almost perfect -1 bps.
My average error for estimating core CPI also went down from -3 bps to extremely low -2 bps.
For public links to my prior month CPI estimates go to ArkominaResearch.com.
The market is currently expecting a first cut in Sep. A hotter CPI print could possibly push expectations further out, while a cooler print could possibly even make Jul a live meeting (depending how low the numbers are) so everyone is impatient to learn what happened with CPI in May.
My CPI estimates are…
Headline CPI
-0.1% MoM (-0.2 pp lower than both consensus and the Cleveland Fed) and +3.0% YoY (-0.1 lower than both consensus and the Cleveland Fed)
Core CPI
+0.1% MoM (-0.1 pp lower than consensus and -0.2 pp lower than the Cleveland Fed) and +3.3% YoY (-0.1 pp lower than consensus and -0.2 pp lower than the Cleveland Fed)
My unrounded estimates:
If CPI comes as I expect, this may still not be enough for the Fed to cut in Jul per se, but they could strengthen the case for Sep. Such CPI numbers could potentially make the Fed move this month as well, but in order for that to happen, the rest of the extremely important data coming out later this month would need to cooperate.
If you’re interested in learning more about what the Fed will likely do this year, when they may start cutting rates and why, consider subscribing to Marko’s Fed Report which, among other things, contains:
A detailed analysis of the economy and which type of landing are we in
An analysis of the monetary policy lags
What will the Fed likely do in the remainder of 2024
PCE inflation (headline and core) trajectory for the remainder of 2024
To get Marko’s Fed Report, make sure to subscribe to Arkomina Research Pro Investor.
By subscribing to Pro Investor you also get:
Marko’s CPI report that goes out each month and contains a detailed analysis of forward looking inflation indicators, detailed CPI forecast and CPI trajectory (headline and core) until Q1 2025
Marko’s Brain Daily that goes out each trading day containing analyses of all relevant macro indicators and events (such as Fed speeches and Fed meetings) prior day, my estimates for all important macro indicators coming out that day and how the market may react to each scenario, as well as my view of the equity and bond market short-term direction, earnings analyses and much more
As a subscriber to this article you get a Special Offer of up to -60% off on premium research.
For more information about Arkomina Research and how to subscribe using Special Offer click this link here.
DISCLAIMER
These articles are for discussion and educational purposes only.
Past performance is no guarantee of future results.
Although specific securities and economic forecasts may be discussed in articles, you should NOT construe any comment as a call to buy or sell any security, or as a legal, tax, investment, financial or other advice. Consult your own advisors if you require such advice.
ANY USE OF THESE ARTICLES IS AT YOUR OWN RISK AND LIABILITY. Neither Arkomina Consulting Ltd nor Marko Bjegovic as its director or any employee, accepts any liability whatsoever for any direct, indirect, consequential, moral, incidental, collateral or special damages or losses of any kind.
Thank You Jasmina 🙏
Thanks will check it out!