February 10, 2022 Headlines

An early morning rally in Treasuries has reversed to a sell-off following another upside surprise in the inflation data. Both headline and core CPI rose 0.6% m/m in January versus expectations of 0.4% and 0.5% gains, respectively. The headline gauge also set a fresh 40-year high of 7.5% year-over-year in January, and the core rate was slightly above expectations at 6% y/y. Higher shelter costs contributed strongly to the core rate increase, with owners’ equivalent rent up 42 basis points (bps), and medical services were up 60 bps. The 2-year Treasury yield is now up 7 bps on the day with market pricing now implying a 50 bps rate hike in March. Equities have reversed sharply as well, with S&P 500 futures swinging from slightly positive before the CPI release to currently down 0.92% (8:57am EST). The markets have already done a lot of the heavy lifting for the Fed with a 2%+ short-term rate priced into Treasuries by 2024.

Jason Haley
Chief Investment Officer

Date	Event	Surv(M)	Actual	Prior	Revised
02/07/22	Consumer Credit	$21.900b	$18.898b	$39.991b	$38.821b
02/08/22	NFIB Small Business Optimism	97.5	97.1	98.9	—
02/08/22	Trade Balance	-$83.0b	-$80.7b	-$80.2b	-$79.3b
02/08/22	Revisions: CPI
02/09/22	MBA Mortgage Applications	—	-8.10%	12.00%	—
02/09/22	Wholesale Inventories MoM	2.10%	2.20%	2.10%	—
02/09/22	Wholesale Trade Sales MoM	1.50%	0.20%	1.30%	1.70%
02/10/22	Initial Jobless Claims	230k	223k	238k	239k
02/10/22	Continuing Claims	1615k	1621k	1628k	1621k
02/10/22	CPI MoM	0.40%	0.60%	0.50%	0.60%
02/10/22	CPI Ex Food and Energy MoM	0.50%	0.60%	0.60%	—
02/10/22	CPI YoY	7.30%	7.50%	7.00%	—
02/10/22	CPI Ex Food and Energy YoY	5.90%	6.00%	5.50%	—
02/10/22	CPI Index NSA	280.441	281.148	278.802	—
02/10/22	CPI Core Index SA	286.065	286.431	284.759	284.77
02/10/22	Real Avg Hourly Earning YoY	—	-1.70%	-2.40%	-2.00%
02/10/22	Real Avg Weekly Earnings YoY	—	-3.10%	-2.30%	-2.00%
02/10/22	Monthly Budget Statement	$23.0b	—	-$162.8b	—
02/10/22	Revisions: PPI
02/11/22	Bloomberg Feb. United States Economic Survey
02/11/22	U. of Mich. Sentiment	67	—	67.2	—
02/11/22	U. of Mich. Current Conditions	72.1	—	72	—
02/11/22	U. of Mich. Expectations	64.5	—	64.1	—
02/11/22	U. of Mich. 1 Yr Inflation	5.00%	—	4.90%	—
02/11/22	U. of Mich. 5-10 Yr Inflation	—	—	3.10%	—

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