Markets often move on themes and these increase or decrease in importance over time. Inflation is a longstanding one, with welcome disinflation rearing its head again, though the pace of falling prices – that last mile to get to most central bank’s target – has been bumpy. There is now hope that US CPI is on a downtrend, while the Fed’s favoured inflation gauge, core PCE, may print with a one handle (+0.1) after the recent PPI data surprised to the downside. It was interesting to us that the cooler CPI data initially trumped the more hawkish dot plot change by the FOMC last week. Overall, the updated projections ... (full story)