US Core CPI Picks Up on Services

Inflation & Monetary Policy - A new regime for inflation and bond yields is anticipated [2] - The economy slowing down could help pull inflation down, but this scenario is undesirable [2] - The Federal Reserve might consider rate cuts with inflation above target and a softening job market, similar to the 1995 scenario where 325 basis point (3.25%) insurance cuts occurred with inflation at approximately 2.3% [3] - A rate cut in September is largely priced in, making it difficult for the Fed to argue against [4] - Jackson Hole symposium later in August (August 21st-23rd) is expected to provide more clarity on the Fed's leaning [5] Economic Data & Analysis - US government data is considered the best globally, with dedicated efforts to ensure data accuracy [1] - Bloomberg Intelligence suggests that a CPI print of 0.2% on the headline indicates the PC print will allow the Fed to ease in September [5] - Modernizing government data collection is necessary but challenging, requiring resources and careful consideration to avoid disrupting historical data analysis [7][8] - Budget cuts to the Bureau of Labor Statistics (BLS) have reduced resources for data modernization [8] - Firing the head of the BLS is viewed as performative and damaging to the credibility of U S institutions [9]