With Core Inflation Up The Fed Won’t Change Its Path

With Core Inflation Up The Fed Won’t Change Its Path

We continue to expect the Fed to raise its Fed Funds Rate by 75 BPS in early November.

Core inflation was up 0.6% month-to-month (6.6%) for the year. Shelter was the primary driver of Core Inflation as it carried a 32.5% relative weighting and was up 0.7% month-to-month. Food was up 0.8% month-to-month and has yet to cool down as a category. For those who are curious Food carries a 13.6% relative weighting which feels low to us (we are not fans of the CPI as a measure of inflation generally speaking). Energy was the only major category that was was down month-to-month at -2.1%. Energy carried an 8.2% relative weighting (also low in our view). CPI full release HERE.