Daily update
Daily update
- US September consumer price inflation is due. Almost a quarter of CPI is the fictitious owners’ equivalent rent measure—a price nobody pays. US homeowners have a lower cost of living than CPI suggests. Economists need the expertise of used-car dealers, with CPI influenced by the rapid slowdown in used-car prices. New car inflation is weird (last month the inflation was almost 33% y/y in Baltimore, and barely 6% in Los Angeles). CPI is expected to show a slowdown in the monthly pace of price increases.
- The US Federal Reserve minutes were hawkish. FOMC members are not only surrounding the economy shouting “raise, raise, raise”, they also want to kick the economy when it is down. A policy overshoot by the Powell Fed was always a distinct possibility, and the odds of an overshoot have increased.
- UK Prime Minister Truss declared that there would be no public spending cuts. The prime minister’s spokesperson quickly clarified that there would be “difficult decisions” on spending. With the government’s forest of magic money trees chainsawed into sawdust by markets, clarity on financial sustainability is still urgently needed.
- German final September consumer price inflation was unrevised. Japanese September producer price inflation rose. A weak yen helped push up commodity prices—non-commodity prices generally slowed.
