September 13, 2022 Headlines

Bonds and stocks are selling off in the wake of another upside surprise in the monthly CPI report. Headline CPI rose 0.1% m/m in August versus expectations of a 0.1% decline, with a 0.8% increase in food costs more than offsetting a 0.5% decline in energy prices. More importantly for Fed leaders, the core rate came in double expectations at 0.6% m/m and 6.3% y/y (6.1% expected).  Shelter costs, which contribute 40% of the core CPI calculation, were up 0.8% in August, including a 0.7% increase in Owners’ Equivalent Rent (OER), as discussed yesterday’s commentary, OER is likely to be a nagging source of price inflation for several months given the run-up in rent prices over the last year or two. Growth in rent prices appears to have moderated in recent months according to national gauges, but there is typically a notable lag in the time it takes to worth through the CPI data. Medical care prices also contributed to the core CPI surprise, rising 0.7% m/m. This report is all but cements a 75 basis point rate hike next week and more hikes to come. Front-end treasury yields have surged 14-17 basis points higher following the CPI release (2yr at 3.74%) with fed fund futures now priced for a 4.28% terminal fed funds rate in Q2 next year. S&P 500 futures are down 2.2% just ahead of the open.  

Jason Haley
Chief Investment Officer



9/13/2022NFIB Small Business Optimism90.891.889.9
9/13/2022CPI MoM-0.10%0.10%0.00%
9/13/2022CPI Ex Food and Energy MoM0.30%0.60%0.30%
9/13/2022CPI YoY8.10%8.30%8.50%
9/13/2022CPI Ex Food and Energy YoY6.10%6.30%5.90%
9/13/2022CPI Index NSA295.588296.171296.276
9/13/2022CPI Core Index SA296.25296.95295.275
9/13/2022Real Avg Hourly Earning YoY-2.80%-3.00%
9/13/2022Real Avg Weekly Earnings YoY-3.40%-3.60%
9/13/2022Monthly Budget Statement-$217.0b-$170.6b
9/14/2022MBA Mortgage Applications-0.80%
9/14/2022PPI Ex Food and Energy YoY7.00%7.60%
9/14/2022PPI Final Demand MoM-0.10%-0.50%
9/14/2022PPI Ex Food and Energy MoM0.30%0.20%
9/14/2022PPI Ex Food, Energy, Trade MoM0.20%0.20%
9/14/2022PPI Final Demand YoY8.80%9.80%
9/14/2022PPI Ex Food, Energy, Trade YoY5.50%5.80%
9/15/2022Initial Jobless Claims227k222k
9/15/2022Empire Manufacturing-12.8-31.3
9/15/2022Retail Sales Advance MoM-0.10%0.00%
9/15/2022Continuing Claims1478k1473k
9/15/2022Retail Sales Ex Auto MoM0.00%0.40%
9/15/2022Retail Sales Ex Auto and Gas0.50%0.70%
9/15/2022Retail Sales Control Group0.50%0.80%
9/15/2022Philadelphia Fed Business Outlook2.56.2
9/15/2022Import Price Index MoM-1.30%-1.40%
9/15/2022Import Price Index ex Petroleum MoM-0.60%-0.70%
9/15/2022Import Price Index YoY7.70%8.80%
9/15/2022Export Price Index MoM-1.10%-3.30%
9/15/2022Export Price Index YoY12.50%13.10%
9/15/2022Industrial Production MoM0.00%0.60%
9/15/2022Capacity Utilization80.20%80.30%
9/15/2022Manufacturing (SIC) Production-0.10%0.70%
9/15/2022Business Inventories0.60%1.40%
9/16/2022U. of Mich. Sentiment6058.2
9/16/2022U. of Mich. Current Conditions59.458.6
9/16/2022U. of Mich. Expectations5958
9/16/2022U. of Mich. 1 Yr Inflation4.60%4.80%
9/16/2022U. of Mich. 5-10 Yr Inflation2.90%2.90%
9/16/2022Net Long-term TIC Flows$121.8b
9/16/2022Total Net TIC Flows$22.1b
9/19/2022NAHB Housing Market Index4849
9/20/2022Building Permits1621k1674k1685k
9/20/2022Building Permits MoM-3.80%-1.30%-0.60%
9/20/2022Housing Starts1460k1446k
9/20/2022Housing Starts MoM1.00%-9.60%

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