The attached is the economic releases due out this week as detailed by Briefing.com.<\/p>\n The CPI will likely get a lot of attention: the tough part to the CPI \/ PPI data the last 18 months, is that the “compares” for the CPI get tougher as we move through 2023, since CPI inflation peaked in June ’22.<\/p>\n Personally, I think this Bespoke chart remains one of the best inflation maps being published today.<\/p>\n Note “peak CPI” in June ’22 (top half of chart), but then the bottom half of the chart \/ table is where the rubber really meets the road: note how for July ’23’s expected CPI print, a +0.0% or +0.1% (low end of expectations) will leave overall CPI at just 3%, but with the above Briefing.com table expecting +0.2% for overall CPI and +0.3% for Core CPI, it’s more likely the year-over-year will come in at 3.19% or 3.29%.<\/p>\n Here’s a better look at the positive progression the last 12 months:<\/p>\n Even Bespoke acknowledges that getting the CPI or general inflation rate down to a “consistent” 2% run-rate will be quite “arduous” and I’d have to agree.<\/p>\n Quick editorial comment: one of the problems with hyper-focus on any particular set of economic data, is that investors start to see “hybrids” or other proxies popping up to either refute or support a particular bias on the data. There are so many inflation proxies today, and more have developed over the last 30 years, with “prices paid” on all the ISM data, and the Fed’s NowCast data (some of which I think is helpful), but we still have CPI, PPI, the PCE deflator data, the “average hourly earnings” data within the jobs report, the “employment cost index data, and there is probably a bunch more that can’t be immediately recalled. Supposedly, Jay Powell has used “core services, ex housing PCE inflation” as one measure that’s been frequently cited on Twitter.<\/p>\n Whatever we see Thursday and Friday from CPI and PPI, expect the arguments to continue to rage.<\/p>\n Are Bonds Prepped for a Decade of Returns like Stocks Saw from 2000 to 2009 ?<\/strong><\/em><\/p>\n Remember, inflation is all about expectations, and bond markets dislike inflation because inflation reduces real (inflation-adjusted) returns.<\/p>\n Here’s two scarier charts from two credible sources:<\/p>\n The first chart is from Rich Bernstein Advisers, while the 2nd chart was cut-and-pasted from Mike Zaccardi’s (@mikezaccardi) twitter feed, from late July and includes the Fed’s (FRED) 10-year breakeven inflation rate chart.<\/p>\n Inflation expectations are rising, not falling, and the 10-year breakeven inflation rates are doing the same, which is not what you’d like to see after a 500 – 525 basis point increase in the fed funds rate.<\/p>\n Two charts \/ tables on bond returns:<\/p>\n Charlie Bilello shows the rolling 3-year returns on the bond market benchmark, the Barclays Aggregate.<\/p>\n Is that bullish or bearish bonds and interest rates ?<\/p>\n![\"\"](\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2023\/08\/briefing.comecondataweekof8723.png\")
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