Heard Jaguar Analytics discuss modifications to how Shelter will be calculated going forward and can lead to lower inflation numbers, just based on the calculation methodology change. does something like that make sense to you, are such changes accounted in your model? Thank you for putting out free research, truely value this.
It's not just shelter. BLS now calculates weights for CPI on an annual basis using only the last year's price data, compared with biannieal updates using two years' worth of data prior. The net effect will be to systematically lower the rate of inflation, at least according to CPI, if not in the real economy.
Not accounting for this change is a major flaw in the analysis.
Thank you as always for the pre-CPI insight. Agree with Negitrage that market likely to ignore the “beat” - implied vol already pricing 3% breakeven equity move which is tough to beat!
Heard Jaguar Analytics discuss modifications to how Shelter will be calculated going forward and can lead to lower inflation numbers, just based on the calculation methodology change. does something like that make sense to you, are such changes accounted in your model? Thank you for putting out free research, truely value this.
It's not just shelter. BLS now calculates weights for CPI on an annual basis using only the last year's price data, compared with biannieal updates using two years' worth of data prior. The net effect will be to systematically lower the rate of inflation, at least according to CPI, if not in the real economy.
Not accounting for this change is a major flaw in the analysis.
Think market probably ignores the "beat" if it can be attributed solely to energy FWIW- core cpi is what Fed and market will focus on
Thank you as always for the pre-CPI insight. Agree with Negitrage that market likely to ignore the “beat” - implied vol already pricing 3% breakeven equity move which is tough to beat!
What headline annual inflation number would the model project? Appears annual inflation would be 6.5% (all-items). (PR Dec 2022 + source: https://data.bls.gov/timeseries/CUSR0000SA0&output_view=pct_1mth)
He says what their expected print is in the first paragraph of the article.
He's asking for YoY not MoM . . . as should have been obvious from reference to a 6 handle . . . .