Potential CPI Surprise: Exit Stocks & Bonds
Heard Jaguar Analytics discuss modifications to how Shelter will be calculated going forward and can lead to lower inflation numbers, just based on the calculation methodology change. does something like that make sense to you, are such changes accounted in your model? Thank you for putting out free research, truely value this.
Think market probably ignores the "beat" if it can be attributed solely to energy FWIW- core cpi is what Fed and market will focus on
Thank you as always for the pre-CPI insight. Agree with Negitrage that market likely to ignore the “beat” - implied vol already pricing 3% breakeven equity move which is tough to beat!
What headline annual inflation number would the model project? Appears annual inflation would be 6.5% (all-items). (PR Dec 2022 + source: https://data.bls.gov/timeseries/CUSR0000SA0&output_view=pct_1mth)