USD inflation preview: NO, inflation is not going away folks..
The monthly inflation reports have proven to be the catalysts for the repricing of USD rates in recent months and we fear another 1-2 sigma event next week. Our calibrated nowcasts have settled on the hottest inflation forecast in town, which will likely prove to be a shocker now that USD duration bets are back in fashion.
The uniformity in the early consensus numbers is striking with right about every analyst on earth expecting a 0.3% MoM print, which has oddly turned into the mechanical monthly forecast every single month.
Chart 1: Consensus for USD core inflation MoM %
Our calibrated nowcasts settle on the hottest inflation forecast in town ahead of next week’s inflation report. There are increasing signs of a broadening of the re-acceleration of inflation trends, and goods may print >0% MoM for the first time in a while.
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