May 11, 2022 Headlines

Treasuries have pivoted from a bull flattening move to a bear flattening following the release of another above-expectations inflation report. The 2-year note yield has traded in a 15 basis point range so far this morning, currently near the high at 2.71%. Both headline and core CPI exceeded expectations in April, with the latter surging 0.6% m/m (0.4% expected). On a year-over-year basis, both measures were down slightly from the previous month thanks to the base effect, but the bigger story for markets in this report are the upside surprises in the month-over-month inflation rates. Some of the primary drivers of the outsized gain in core prices were shelter/housing and airfares, the latter of which surged by 18.6% m/m. That monthly gain in airfares shattered the previous record of a 10.7% increase set in March. Any hopes that inflation had peaked in March clearly evaporated in this report, and it certainly doesn’t make Jerome Powell’s job any easier.

Jason Haley
Chief Investment Officer

05/09/22Wholesale Inventories MoM2.30%2.30%2.30%
05/09/22Wholesale Trade Sales MoM1.80%1.70%1.70%1.50%
05/10/22NFIB Small Business Optimism92.993.293.2
05/11/22MBA Mortgage Applications2.00%2.50%
05/11/22CPI MoM0.20%0.30%1.20%
05/11/22CPI Ex Food and Energy MoM0.40%0.60%0.30%
05/11/22CPI YoY8.10%8.30%8.50%
05/11/22CPI Ex Food and Energy YoY6.00%6.20%6.50%
05/11/22CPI Index NSA288.715289.109287.504
05/11/22CPI Core Index SA289.822290.455288.811
05/11/22Real Avg Hourly Earning YoY-2.60%-2.70%-2.60%
05/11/22Real Avg Weekly Earnings YoY-3.40%-3.60%-3.50%
05/11/22Monthly Budget Statement$260.0b-$225.6b
05/12/22PPI Final Demand MoM0.50%1.40%
05/12/22PPI Ex Food and Energy MoM0.60%1.00%
05/12/22PPI Ex Food, Energy, Trade MoM0.60%0.90%
05/12/22PPI Final Demand YoY10.70%11.20%
05/12/22PPI Ex Food and Energy YoY8.90%9.20%
05/12/22PPI Ex Food, Energy, Trade YoY6.50%7.00%
05/12/22Initial Jobless Claims192k200k
05/12/22Continuing Claims1368k1384k
05/13/22Import Price Index MoM0.60%2.60%
05/13/22Import Price Index ex Petroleum MoM0.70%1.10%
05/13/22Import Price Index YoY12.10%12.50%
05/13/22Export Price Index MoM0.70%4.50%
05/13/22Export Price Index YoY18.80%
05/13/22Bloomberg May United States Economic Survey
05/13/22U. of Mich. Sentiment6465.2
05/13/22U. of Mich. Current Conditions7069.4
05/13/22U. of Mich. Expectations61.562.5
05/13/22U. of Mich. 1 Yr Inflation5.50%5.40%
05/13/22U. of Mich. 5-10 Yr Inflation3.00%
05/13/22Revisions: Manufacturing Shipments, Orders, Inventories


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