I understand we may have seen peak CPI inflation back in the July print when we saw 9.1% headline CPI.
However, peak inflation doesn’t mean inflation is magically back to 2%, or anywhere close to the Fed target.
Looking at the Cleveland Fed Inflation Nowcast, they’re predicting the next headline print releasing in November (for October Inflation) will be .78% MoM, and core will be .54% MoM. When we annualize these, we get 9.36% CPI and 6.48% Core CPI looking 12 months forward – This is a disaster and indicates the Fed is barely half-way done if we need rates higher than inflation. Source – https://www.clevelandfed.org/indicators-and-data/inflation-nowcasting
I’m not seeing a slowdown anywhere. So can someone help me understand where this pivot and slower inflation narrative is coming from? I saw multiple people mention PCE but that doesn’t seem to tell the whole story.