US CPI still allowing a “choose your own adventure” by way of opinion. Headline looks good, core is trending in the right direction, still elevated, and medium term expectations did tick up earlier (bad) and the budget remains stimulatory (places upside pressure).

Market liked it, and thanks to the Whisperer (a journalist who seems to be in-the-know/preffered-source for the Fed) believes that a “skip” (not hiking tomorrow, but may well do so at the meeting after) is likely, with commentary to point to high for longer, if/as/when required, till the job is done.

Forward looking automotive outcomes and rental rate declines should get us to goldilocks. You can see below the recovery in US vehicle production (where the shortfall had been a major driver of inflation) and the Zillow rent renewal rates (where household formation demand had been a major driver of inflation) data suggest that we will see further downside (i.e lower) inflation prints from here on out.

So, overall, good enough, and the future still looks pretty good. As a shorthand for the economy, as long as housing holds up, everything else should too.

Note, we are very bearish on Australian housing outcomes (just to distinguish the two, i.e. the US, versus more local affairs).

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