US inflation
Good enough, I suppose, on the inflation front, with CPI core at 0.4% mom, and YoY trending lower.
That budget deficit (-8%) has to working in the other direction, however. Means Fed has to hold at restrictive levels for longer than perhaps otherwise anticipated.
Most measures are moderating, whether we look at supercore (excluding anything remotely volatile) core (some volatile items) and headline (includes volatile items).
A key one is shelter (imputed rents), which takes a while to flow through the data (market based measures of US rents peaked over a year ago, and have been declining since). Those lags means we can expect ongoing deflationary contributions from owners equivalent rents in the CPI data over the next couple quarters worth of inflation data.
That’s good!
Goldilocks continues.
Treasury yields declined a touch, good for the bond portfolio, stocks in general slightly weak, but tech (duration) sensitive names (e.g. the Nasdaq) held up well.
Again, whilst I often lament some of our own exposures to secular growth, I am occasionally pleased when they work better than I expected (that’s the whole point of diversification). The NDQ is up quite a bit, and having even a modest amount has been, on net, beneficial.
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