Last week was inflation week, with data reports including CPI, PPI, Import and Export Prices as well as an update on Inflation Expectations from the York Fed and the University of Michigan Survey.
The bottom line is that the disinflationary trends of 2023 have dissipated and inflation expectations starting to edge higher.
This is bad news for the Fed, who had explicitly stated at the last Fed meeting that they needed additional “confidence” that disinflationary trends would continue. There has been very little since the last Fed meeting to reassure policy makers that the trends in disinflation will persist.
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