00:00It's a September surprise. Monthly consumer price inflation came in a tick lower than forecast last month for both headline and core, up three-tenths and two-tenths.
00:10Housing, food and car costs were remarkably restrained. The government's measure of home prices rose at the slowest pace since January 2021.
00:20The White House hailed the numbers and analysts say it confirms the Fed will cut rates again.
00:26But annual inflation is still rising, both core and headline, up three percent over the past 12 months.
00:34The Fed's target is two percent. Furniture, clothing and personal care products jumped as tariffs fed through into prices.
00:42It's what economists call a K-shaped report, with slowing inflation for some products offsetting the tariff impact.
00:49And since the Fed thinks those import tax increases will be one-off moves, they'll go ahead and cut next week.
00:57The Fed's going to keep on cutting rates. It's generally a better-than-expected report, but I think what it really shows is we have a K-shaped economy and it's sort of a K-shaped CPI report.
01:08It also may be the last CPI report for a while. The White House says the government can't collect price data for this month because of the shutdown, so there won't be an October CPI report.
01:20There likely won't be a jobs number either. Whether the Fed can cut again in December is an open question.
01:26You can't know where you're going if you don't know where you are.
01:29You can't know where you're going if you don't know where you are.
Be the first to comment