US inflation printed at 0.4% in both headline- and core terms, which was in line with our nowcasts and substantially above embedded market expectations.

In full transparency, we didn’t get everything right, but the broadness of the continued inflation in services and the early signs of a re-acceleration in goods prices outside of cars rhyme with our predictions.

Especially transportation services keep printing at levels that are way too hot for the Fed to take comfort in and it is likely a hint of a re-increasing momentum in wage expectations and wage growth.

Chart 1: The detailed US CPI break-down