FEBRUARY 15, 2023 – Well, when you are wrong you need to admit it:) I felt all along my CPI forecast around 5.6% was too low. The CPI gets recalibrated each January and thus it is very tough to figure out where the ‘new’ numbers will fall. I sure didn’t expect them to be as high as they were. This is the first sign of inflation returning since last June.
The 3-month annualized inflation rate is 1.6%. The 6-month annualized inflation rate is 2.0%. Both figures are still much lower than the annualized rate (6.4%) and thus indicate the annual CPI should continue to decline.
My prediction for next month’s figure is 5.7%. My gut tells me it may be closer to 6.0%.
As for the July 12th forecast, the data now suggests a ceiling around 3%. The odds are still good for a figure around 2%.
Til next month…..forecasting will humble you. But, that is a good thing.
The Mann

P.S. I did want to mention that the market has told the Fed to do two more 25bp rate increases.