On May 15, we will get what is probably the most important data this month… US April CPI.
Cleveland FED inflation nowcast expects YoY headline CPI at 3.50% (Bloomberg average consensus is now at 3.39%). In the case of Core CPI Cleveland FED model expects 3.65% (Bloomberg average 3.62%).
Today we got the University of Michigan Inflation Expectation… 1-year ahead increased to 3.20% - see Figure 1. A jump in expectations of 60 bps in 2 months does not look good, but historically we have already had similar increases without affecting the current inflation:
+130 bps in two months (Sep-2023 to Nov-2023), and
+110 bps (Mar-2023 to Apr-2023).
Figure 2 additionally presents the New York FED Median one-year ahead expected inflation rate (Survey of Consumer Expectations). The New York FED series correlates well with the University of Michigan series, but interestingly there was no increase in expectations at all in the period of Sep-2023 to Nov-2023.
Figure 3 shows the average of U. of Michigan & New York Fed inflation expectations.
Now, let's check longer term inflation expectations. Figure 4 shows long-term inflation expectations for both the University of Michigan and New York Fed data series. Ok, there is a 30 bps jump in Un. of Michigan series – but I'm not sure if this has any greater meaning …
Either way, the most important data will be the CPI for April, published on May 15 (and the PPI will be released the day before).
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