US CPI/PPI - 2025-09-10

After yesterday's big beat in PPI (and downward revisions to the prior month), this morning's CPI miss is a shocker. The worst culprit was owner's equivalent rent. And for the first time in a while, goods inflated more than services -- which, at least at a simplistic level, is an indicator of tariff impact. But the goods component of CPI is still up only 1.37% YOY, more than a percentage point below the Fed's 2.5% target for it. It wasn't so long ago that every central bank in world was terrified of too-low inflation impinging on the "effective lower bound" for policy rates. This should be a relief. This won't keep the Fed from cutting rates at next week's FOMC meeting. If there was any doubt, a jump up in jobless claims sealed the deal (and having Miran confirmed by the Senate on Monday, just in time to vote Wednesday and improvise a nice dovish "dot," surely doesn't hurt).