Supercore CPI becomes the Fed's new favourite📢

The concerning price action might have been placed on a variety of culprits: an uninspiring catalyst for the fall in CPI on airfares and used car prices, still high supercore CPI, imbalanced positioning, weak technical price actions, but the takeaway is that risk-markets have started to trade heavier in August than the past 3 months of this latest goldilocks rally.

Later in the NY morning, SF Fed President Mary Daly specifically mentioned that Thursday's CPI "came in largely as expected, and that is good news", but "it is not a data point that says victory is ours. There's still more work to do. And the Fed is fully committed to resolutely bringing inflation back down to its 2% target". Finally, a specific mention of "we need to see supercore inflation come back to pre-pandemic levels before I feel comfortable we've done enough" and "we are a long way from a conversation about rate cuts" were seen as a pretty emphatic downplaying of today's CPI optimism, especially with their new 'supercore' measures showing a rebound of prices in July.

#CPI #Fed #NY #MaryDaly #inflation