Kuzu zangpo la and welcome to the Metz Market Minute for the Chrisman Commentary.
Why .1% can matter: CPI numbers came out showing annualized inflation closer to 4%. The bigger story was that pesky little .1% difference between the forecast .3% Core CPI and the actual .4%. That was big for two reasons:
1.) It put Core CPI at double the prior month's reading, and indicates inflation closer to 5% annualized.
2.) It shows the energy inflationary trends bleeding over into the rest of the economic's metrics. Dun dun dunnn.
PPI, like CPI but different: Our other fun inflationary metric came out with very similar results. It shows annualized inflation closer to 6%, and was 5x higher than the forecast. 5 times. It was the biggest monthly increase since COVID insanity.
Warsh: Warsh received his confirmation by the slimmest margin in Fed history. Stephen Mirren, as expected, resigned to make room for him. Eyes are on Warsh to see how he handles things. He's already said he wants to investigate alternative inflationary models, the only two specified being trimmed mean PCE and median PCE. Trimmed Mean PCE is at 2.4%. That's a much nicer read if...
Rate Cut? Or Rate Hike? People expect Trump will heavily pressure Warsh for rate cuts, and nicer inflation numbers would help with that. However, this week's results have the overwhelming market odds on a rate hike before the end of the year.
Cotality: Cotality had an interesting reading showing 1 in 12 sellers now face capital gains above the exception for their primary home sale due to the amount of equity they've gained. 25% of Californians, but also 11% of Coloradoans! We needed more Lock-In Effects
For more details on some of the economic reports that came out this week, feel free to check out the calendar here.