CPI Game Plan

Below are Street consensus estimates, as well as previous readings, for both headline and core CPI.

My preference is to focus on the month-over-month prints. Year-over-year is polluted by old information from 11 months ago that doesn’t enhance our understanding of current inflation dynamics.

The month-over-month data is also useful to generate 3-month and 6-month moving averages, which is what policy makers rely on for assessing current trends.

As far as policy is concerned, CPI is about political showmanship:

• Due to quirks in how CPI and PCE are put together, there is no direct passthrough to core PCE, which is what the Fed relies on as its main inflation gauge. The two measure attempt to capture different things.

• The inputs into September PCE are basically baked in the cake at this point and will not be influenced much by CPI - whatever the number may be.