What are the odds CPI comes in decently below the expected 8.0/8.1 expectation?

[nick665]

I was looking at the cpi data here: https://www.bls.gov/regions/mid-atlantic/data/consumerpriceindexhistorical_us_table.htm

It looks like the rate of inflation over the last 3 months is relatively "stable" and hasnt been going up month to month. CPI percentage is determined by comparing CPI from the previous years CPI for that same month.

Bear with me here -

For the last 2-3 months, the CPI of 2021 july-sept remained pretty consistent month to month and so has the CPI for 2022 july-sept.

Now, there was a pretty big jump in CPI from september 2021 to october 2021 and since CPI % is comparing the CPI for the same month against the previous years month - in order for us to have this expected 8%-8.1% increase, we would need to see a similar jump in CPI for October.

From my anecdotal experience, prices remain high, BUT they havnt really increased - theyve just stayed expensive...

I feel like CPI % might come in around 7.6%

Am i missing something here? Really curious what you guys think.

 

[michaelpault]

@nick665 Nailed it

 

[halinka]

@michaelpault Ya he was bang on. I haven't had any investments since September of 21. Wondering if this could be a sign of a bullish market to come

 

[matrix80]

@halinka I doubt it. +5% on a 7.7% inflation report (despite the modest "beat")? It's ridiculous. It just shows how much bullishness is *still*out there.

Sadly, this is why we can't have nice things.

I'm sure the Fed is not happy about this rally. It's the opposite of what it's trying to achieve. It's going to keep raising rates. And rates are going to be elevated for longer than folks realize because while the 7%-8% inflation will go pretty quickly, it's the 4%-5% inflation that will take years to get back down to 3%. And that means no meaningful rate relief from these levels for quite some time.

Bubbles die hard. There are more hearts to break.

But... we'll see. I've been wrong before.

 

[mandyg123]

@michaelpault Wow can't believe he hit it on the head. Nice work.

I feel pessimistic about the markets but if inflation comes back down/interest rates come down, job markets stay strong, and you still have households with strong cash positions it could be the case for the next bull run.

 

[avidreader1]

@nick665 Diesel prices were up 4% MoM and jobs reports were 'strong'. A low CPI would be a surprise. I frankly wouldn't expect the Fed to loosen policy until unemployment goes up.

 

[praisesmith]

@nick665 Cleveland Fed NowCast has it at 8.09 so seems like it’s going to be close to that

Why do you feel like it is coming in lower? What you’re missing is making predictions based on actual quantifiable data

 

[pio93]

@praisesmith Base effect. Last year’s inflation ratcheted up big time from 5% in September to 8% in October. With inflation being fairly stable MoM recently it should begin to come down from the base increase alone going forward. If inflation actually declines month over moth as we lap higher bases it could come down a lot quicker than expected. But who knows.