What you’re not hearing about Jerome Powell’s “evidence” that inflation is really dead.

Powell is looking for unspecified “evidence” that disinflation is “sustainable.” He says it doesn’t have to get better, indeed it could even get worse, and rate cuts can happen. Waller warned about revisions to CPI seasonal adjustments, which he claims “erased” 2022’s disinflation progress. He’s wrong about 2022. But the 2023 revisions released on Friday show disinflation making more progress, not less. Tomorrow’s January CPI will be soft, and so will February’s, both released before the March FOMC. The futures curve has given up on a March rate cut. We haven’t.