- Prior was +2.7%
- CPI M/M +0.3% vs 0.3% expected
- Prior +0.3%
- Core CPI Y/Y +2.6% vs +2.7% expected
- Prior +2.6%
- Core CPI M/M +0.2% vs +0.3% expected
- Prior +0.2%
- US Supercore CPI M/M +0.29% vs +0.35% prior
We have a dovish surprise here as Core CPI figures came on the lower end of the forecasts. The market was pricing 52 bps of easing by year-end but that has increased to 57 bps now.
In the markets, we have of course a classic dovish reaction with US stocks rising, US dollar falling, precious metals increasing gains and US yields dropping.
The data confirms the easing seen in November when the much lower than expected numbers were taken with a pinch of salt due to shutdown related issues.
In the bigger picture, this is not going to change much for the Fed, but with falling inflation and strenghtening economy, it should support the risk sentiment going forward unless Trump throws one of his bombs.
