Participant

CPI numbers came in looking pretty week, especially given the FED’s view that there may be inflationary pressure around the corner. Core inflation YoY was up very little at 1.8% from last month’s 1.7%. But the YoY inflation rate came in negative 0.1% down from last month’s 0.0%. Negative YoY inflation has not been seen since late 2009. This seems to me to give more evidence, along with this month’s low non-farm payroll, to a possible slowdown of the economy and certainly doesn’t invite to think the FED will be hiking rates in June. Unless we see a big turnaround in next month’s data, which I would see as unlikely, looks like a rate hike will be on hold for now.

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