DB on CPI: Atlanta Fed’s sticky CPI series is now up by +5.1% on a 3m annualised basis, the fastest it’s been since April 2023.
So the concern for markets will be that inflation is showing some signs of rebounding, or at the very least stabilising at above-target levels.
— Taylor Riggs, CFA (@RiggsReport) March 13, 2024
Recent data from the Atlanta Fed’s sticky Consumer Price Index (CPI) series reveals a concerning trend, with a 3-month annualized basis hitting +5.1%—the fastest since April 2023. Markets are now grappling with the realization that inflation might be rebounding or, at the very least, stabilizing at levels above the targeted range.
On Tuesday, the White House entered a mode of denial, with Press Secretary Karine Jean-Pierre making claims that inflation is down two-thirds and touting the lowest annual core inflation since May 2021. However, these assertions stand in stark contrast to the reality reported by the Bureau of Labor Statistics.
According to the official government report, consumer prices increased by 0.4% in February, a slight uptick from the previous month’s 0.3%. In the past 12 months, prices surged by 3.2%, surpassing January’s annual pace of 3.1%. Excluding volatile food and energy prices, the core prices also rose by 0.4% from January to February, surpassing the pace consistent with the Federal Reserve’s 2% target.
This inconvenient truth about rising inflation has become a persistent challenge for both the Federal Reserve and President Joe Biden’s re-election campaign. The February inflation numbers highlight the ongoing struggle to manage inflationary pressures, despite the White House’s attempt to downplay the situation.
As the Biden administration grapples with economic challenges, the public’s awareness of inflationary pressures continues to grow, posing potential hurdles for the administration’s policy narrative and the President’s political standing. The reality of rising consumer prices remains a significant concern for both policymakers and the broader public.
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