Yesterday and today current data for the Producer Price Index (PPI) and the Consumer Price Index (CPI) was released, the outcome year over year showed 8.5% vs 8.7% for the previous month and 8.2% vs 8.3% respectively. So why all the fuss? Unfortunately, the financial narrative is broken, no longer engaged with a strategy to inform, but instead with a motive to influence.
The consensus numbers, namely the expected outcome of the inflation data, were too optimistic and easily beat by the actual data. This has been surprising given the recent track record, but the focus unfortunately was on the consensus rather than the difference between the current level of inflation and the past data levels. In my opinion, the focus is missing the point, namely, that inflation may not be going down, but it’s also not going up. What does that mean?