Notes From the Desk: US Inflation – Holy Relief Trade Batman (May 15 2024)
After three months of surprises to the upside, April’s US inflation data was in line (to a touch softer) with the consensus expectations.
By the numbers:
- MoM Headline CPI 0.3% (0.4% expected).
- MoM Core CPI 0.3% (0.4% expected).
- YoY Headline CPI 3.4% (3.4% expected).
- YoY Core CPI 3.6% (3.6% expected).
The implications:
- Interest rates dropped ~ 8 bps as traders moved to price in two cuts from the Fed this year.
- A single data point a trend does not make. We suspect the Fed will want further evidence of inflation cooling before making their first move.
