Syz the moment

This metric has DOUBLED in just several months, according to the University of Michigan Consumer Survey. To put this into perspective, median inflation expectations have been at ~3% for the last 3 years. Consumer sentiment has been severely damaged by rising prices of necessities, and expectations are getting worse. This comes as core CPI inflation has been above 3% for 41 months, the longest streak since the early 1990s. Inflation is still a major concern for Americans. Source: The Kobeissi Letter

Core CPI inflation RISES to 3.3%, above expectations of 3.2%. For the first time since March 2023, Core CPI inflation is officially back on the rise. Same story on CPI as previous month: Total is “ok” at +2.4% because energy is collapsing, but core is still +3.3% and Services remain HOT & STICKY at +4.7%. Transport +8.5% Indeed, while September CPI inflation is at 2.4%, inflation is much higher in many basic necessities: 1. Car Insurance Inflation: 16.3% 2. Transportation Inflation: 8.5% 3. Homeowner Inflation: 4.9% 4. Car Repair Inflation: 4.9% 5. Rent Inflation: 4.8% 6. Hospital Services Inflation: 4.5% 7. Food Away From Home Inflation: 3.9% 8. Electricity Inflation: 3.7% Source: Bloomberg, HolgerZ, The Kobeissi Letter

The Second Wave of Inflation. This is what the Fed is thinking but isn't saying out loud. If you expand the dataset to the CPI's of Western economies, 87% of the time there's a second wave. Source. TS Lombard, Eric Hale

Core PPI inflation was unchanged, at 2.4%, below expectations of 2.5%. PPI inflation is now at its lowest level since February 2024. On a sequential basis (MoM), the picture is not the same: August's core PPI rose more than expected, driven by higher service prices, while goods prices stayed flat. PPI 0.2% MoM, Exp. 0.1% PPI Core 0.3% MoM, Exp. 0.2% Source: Ali Dhanjion X, Factset

Goods deflation in the US is the biggest in 20 years... Source: www.zerohedge.com

Inflation in August declined to its lowest level since February 2021, according to a Labor Department report Wednesday that also showed a key measure higher than expected, setting the stage for an expected quarter percentage point rate cut from the Federal Reserve. Indeed, while the headline CPI increased 0.2% for the month, in line with the Dow Jones consensus, the core CPI, which excludes volatile food and energy prices, increased 0.3% for the month, slightly higher than the 0.2% estimate. The slight uptick in core CPI keeps the Fed on defense against inflation, likely negating the probability of a more aggressive interest rate when policymakers meet next Tuesday and Wednesday. Here are the details: -> CPI 0.2% MoM (or 0.187% unrounded), Exp. 0.2% - in line -> CPI Core 0.3% MoM (or 0.281% unrounded), Exp. 0.2% - hotter than expected. Note that was the 51st straight month of MoM increases in Core CPI, and a new record high. The annual prints: -> CPI 2.5% YoY, Exp. 2.5% - in line. The annual CPI increase is the lowest since February 2021... -> CPI Core 3.2% YoY, Exp. 3.2% - in line Last, but not least, and perhaps most ominous of all, is that while the Fed is about to start cutting rates, Supercore CPI rose 0.33% MoM (see chart below), the biggest monthly increase since April, driven by continued acceleration in transportation services, which jumped the most in 5 months. Source: www.zerohedge.com, Bloomberg

Source: WSJ, Mike Zaccardi, CFA, CMT, MBA

Over the last 2 years, inflation expectations have fallen from ~8.0% to 4.9%, recording a similar drop as during the 2008 Financial Crisis. As a result, expectations are now at levels seen in the 2015-2019 period. Furthermore, 1-year inflation expectations in the University of Michigan consumer survey fell to 2.8%, the lowest since December 2020. Source: The Kobeissi Letter