Major banks put out their inflation expectations late yesterday. Consensus is 0.8% m/m.
BIDEN CHATTER
Lots of talk on it being over the top with Biden and others preparing us for the worst. While it may be true, this is an old game leaders play:
If inflation is bad they get to tell you they are on top of it and the fact that they are monitoring it closely is proof of that.
If inflation is not bad, they get to take credit
While we have no choice but to listen to these speeches sometimes. It is best to not base decision on what they “offer” to help us with before the facts come out.
GOLDFIX TAKE
All we can say is: as of right now at 7:36 AM ET, the markets are focused on the Fed raising rates again, and they are telling us tenuously that the inflation is near peaking.
Why? Because the dollar is strong and short term bonds yields are up. But long term bond yields are down. This signals a market that says, “hey, we’re gonna raise rates now, and that will be good for the economy later.” The confirmation is in stocks as Tech is up so far. That is the market hope at the moment.
***But this means nothing once the number comes out***
JPM
Released on Fri, Jun 10, at 8:30am We believe the consumer price index (CPI) increased 0.8% in May. This jump should come with a strong increase in energy prices (4.6%)—as gasoline prices increased noticeably again that month—along with continued solid gains for food prices (0.7%) and the core index (0.47%). With this forecast, we expect year-ago CPI inflation to hold at 8.3% between April and May. We do expect some moderation in the core index, with year-ago inflation easing from 6.2% in April to 5.8%.
Within the core index, we look for solid price increases across many of the main underlying categories. The rent measures have been firm lately, and we expect continued strength into May, with tenants’ rent up 0.49% and owners’ equivalent rent increasing 0.45%.
Lodging prices also have jumped lately as travel activity rebounded from the COVID-related shock and we look for another strong increase in May, with prices up another 2.0%. Public transportation prices also have risen significantly lately, which likely reflects increased demand for travel and higher fuel prices; we expect a 1.5% increase in public transportation prices to be reported for May.
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BOA
Preview: We look for another hot inflation report in May, with headline spiking 0.8% (0.75% unrounded) mom and core CPI rising 0.5% (0.50% unrounded) mom. We expect consumer sentiment to increase modestly from 58.4 to 59.0 in its preliminary June reading, taking signal from our US Consumer Confidence Indicator.
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Barclays
May CPI to rise 0.8% m/m
We estimate that inflationary pressures accelerated on the energy side, while core price pressures softened somewhat. We forecast headline CPI to have increased 0.8% m/m and 8.4% y/y, and the NSA index to be 291.720. We expect core CPI to rise 0.5% m/m and 5.9% y/y.
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Have a great weekend, Founders Sunday will tentatively discuss Inflation: PCE versus CPI and Gold/ Silver CoT focus
