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

Date	Event	Survey	Actual	Prior	Revised
9/13/2022	NFIB Small Business Optimism	90.8	91.8	89.9	—
9/13/2022	CPI MoM	-0.10%	0.10%	0.00%	—
9/13/2022	CPI Ex Food and Energy MoM	0.30%	0.60%	0.30%	—
9/13/2022	CPI YoY	8.10%	8.30%	8.50%	—
9/13/2022	CPI Ex Food and Energy YoY	6.10%	6.30%	5.90%	—
9/13/2022	CPI Index NSA	295.588	296.171	296.276	—
9/13/2022	CPI Core Index SA	296.25	296.95	295.275	—
9/13/2022	Real Avg Hourly Earning YoY	—	-2.80%	-3.00%	—
9/13/2022	Real Avg Weekly Earnings YoY	—	-3.40%	-3.60%	—
9/13/2022	Monthly Budget Statement	-$217.0b	—	-$170.6b	—
9/14/2022	MBA Mortgage Applications	—	—	-0.80%	—
9/14/2022	PPI Ex Food and Energy YoY	7.00%	—	7.60%	—
9/14/2022	PPI Final Demand MoM	-0.10%	—	-0.50%	—
9/14/2022	PPI Ex Food and Energy MoM	0.30%	—	0.20%	—
9/14/2022	PPI Ex Food, Energy, Trade MoM	0.20%	—	0.20%	—
9/14/2022	PPI Final Demand YoY	8.80%	—	9.80%	—
9/14/2022	PPI Ex Food, Energy, Trade YoY	5.50%	—	5.80%	—
9/15/2022	Initial Jobless Claims	227k	—	222k	—
9/15/2022	Empire Manufacturing	-12.8	—	-31.3	—
9/15/2022	Retail Sales Advance MoM	-0.10%	—	0.00%	—
9/15/2022	Continuing Claims	1478k	—	1473k	—
9/15/2022	Retail Sales Ex Auto MoM	0.00%	—	0.40%	—
9/15/2022	Retail Sales Ex Auto and Gas	0.50%	—	0.70%	—
9/15/2022	Retail Sales Control Group	0.50%	—	0.80%	—
9/15/2022	Philadelphia Fed Business Outlook	2.5	—	6.2	—
9/15/2022	Import Price Index MoM	-1.30%	—	-1.40%	—
9/15/2022	Import Price Index ex Petroleum MoM	-0.60%	—	-0.70%	—
9/15/2022	Import Price Index YoY	7.70%	—	8.80%	—
9/15/2022	Export Price Index MoM	-1.10%	—	-3.30%	—
9/15/2022	Export Price Index YoY	12.50%	—	13.10%	—
9/15/2022	Industrial Production MoM	0.00%	—	0.60%	—
9/15/2022	Capacity Utilization	80.20%	—	80.30%	—
9/15/2022	Manufacturing (SIC) Production	-0.10%	—	0.70%	—
9/15/2022	Business Inventories	0.60%	—	1.40%	—
9/16/2022	U. of Mich. Sentiment	60	—	58.2	—
9/16/2022	U. of Mich. Current Conditions	59.4	—	58.6	—
9/16/2022	U. of Mich. Expectations	59	—	58	—
9/16/2022	U. of Mich. 1 Yr Inflation	4.60%	—	4.80%	—
9/16/2022	U. of Mich. 5-10 Yr Inflation	2.90%	—	2.90%	—
9/16/2022	Net Long-term TIC Flows	—	—	$121.8b	—
9/16/2022	Total Net TIC Flows	—	—	$22.1b	—
9/19/2022	NAHB Housing Market Index	48	—	49	—
9/20/2022	Building Permits	1621k	—	1674k	1685k
9/20/2022	Building Permits MoM	-3.80%	—	-1.30%	-0.60%
9/20/2022	Housing Starts	1460k	—	1446k	—
9/20/2022	Housing Starts MoM	1.00%	—	-9.60%	—

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