US CPI/PPI - 2024-10-09

It was the miss we expected. But headline CPI still printed below the Fed's target for the month. Without OER, inflation year-on-year is far below target. Our monetarist model continues to be eerily correct, showing Core CPI ex-OER curling up from the bottom several months ago, even as M2 growth is far slower than historical precedent. This should surely be good enough to assure another 25 bp rate cut at the November FOMC, even though markets have begun to doubt it.