Jan US CPI report: Let’s discuss…

A short thread 🧵

If you look at the Atlanta Fed's measure for "Flexible" CPI, so basically commodities ex. food and energy (i.e. household supplies, appliances & clothing), the measure has done a full round trip: 19.7% in Feb 2022 to just 0.1% in Jan…

Like we've been saying: Elevator up = elevator down...

This is not inflationary…

… and neither is this…

Now, CPI Shelter makes up 34.4% of US CPI and accounts for roughly 60% of Services...

And, as we've previously highlighted in our GMI newsletter, CPI Shelter just lags Home Prices by fifteen months...

… and house prices simply lag the supply of new homes on the market by seven months...

"Sticky" is just a fancy word for lagging, and this is the main reason CPI remains inflated, for now…

However, it's very clear where CPI Shelter is heading over the next twelve months.

Macro is really a story of economic dominos and CPI is the same story…

Stay focused.