INFLATION UPDATE

JANUARY 17, 2024 – The December report came in at 2.9%, exactly where the data indicated and above my estimate at 2.6%-2.7%. The 3-month annualized inflation rate is 0.4%. The 6-month annualized inflation rate is 0.9%. These figures are well below the annualized rate (2.9%) and thus indicate the annual CPI should decline slightly. In fact, the data is predicting a reading of 2.4%-2.5% next month. Inflation is at its highest at the beginning of the year. So, I think it will be 2.7%-2.9%.
As a side note, the monthly CPI has been at 0.20% or lower for 8 straight months. There are many areas of deflation out there.
The market has the Fed Funds Rate priced at 4.3%-4.4%. It was recently cut to 4.75%. The Fed doesn’t have much catching up to do. Til next month.
Shalom,
The Mann