November Consumer Prices (reported today) were in line with expectations: CPI YoY +3.1% (3.1% est.); CPI MoM +0.1% (0.0% est.); Core CPI YoY +4.0% (+4.0% est.); and Core CPI MoM +0.3% (+0.3% est.).
No inflation-era lows were achieved in any of the CPI categories which will keep the Fed on script and focused on its 2% long-term inflation goal in tomorrow’s FOMC policy statement. The upside is that the CPI measures of inflation are steady near recent lows, similar to Friday’s Nonfarm Payrolls reported Friday at 199k, 10k above the estimate but within long-term ranges. Trader and market impatience aside, the recent data suggests the Fed is piloting the economy into a soft landing.
The dollar is mixed in narrow ranges against the G10 currencies but leaning towards dollar weakness. The dollar index is -0.28% at 103.808, midway between its recent 104.25 high and 103.50 low.
U.S. Treasury yields have ticked higher today in all tenors, with the 2-year yield gaining the most +0.025%.
Global equities are a mix of small gains and losses, consistent with other markets, with traders sidelined by the start of the FOMC’s 2-day policy meeting today. No change is expected to the current 5.50% target rate in tomorrow’s rate announcement.
