美国7月CPI同比涨3.4%符合预期，核心CPI同比涨2.5%

Bloomberg Audio Studios, podcasts, radio, news. This is the Bloomberg Surveillance Podcast. Catch us live weekdays at 7 a.m. Eastern on Apple CarPlay or Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Eric Winrad here wrapped around CPI chief economist Alliance Bernstein. So the rub is that lower inflation is wrapped around reduce real estate, reduce this, reduce that.

Is it just those odd things that could draw down us towards disinflation or is there more going on than that?

Well, that's what we're going to find out in a little bit, right, Tom? You know, I I think that last month's soft print was largely due to some unusual factors all sort of pointing soft in the same month. Uh, but I know your colleague Anna Wong has been out with a piece arguing that that in that that today's number is likely to be lower because of some of these things. I think she's largely right. I can't say for sure whether it'll happen with this month's print or next month's print, but the things she's pointing to are likely to point lower in our view over the course of the next few months.

Eric, I'm just looking at your notes, which are very helpful. Because Chair Walsh has not been willing to tell us about his reaction function, he's left the impression that the market is in charge of determining whether the Fed hikes in September or not. So if that's the case, we need to pay attention to this. I guess

for sure. Look, I I think because Wars has left a vacuum, an analytical vacuum in the way that he talks about the economy, which is to say he basically doesn't talk about the economy. He hasn't told us what he thinks about it. He hasn't told us what would trigger a rate hike in his mind or even if he's willing to raise rates. And so the impression here that he has left is that if the market prices it then he'll probably do it.

Uh that does make today's data point particularly important. I would say though that it's not determinant. There is another CPI print. There is another payrolls print and Cher Walsh has another chance in the form of his Jackson Hole speech to guide the market before the next Fed meeting. But yeah, what's our audience seeing in inflation? Because I get, you know, we Paul and I get mail.

There's frankly no other topic in America.

Yeah. You know, again, it's a difficult topic for individual households to assess because all of us, none of us really face inflation. We face the price level, right? We don't face the rate of change, which is what inflation's measuring. What we have in our mind is a memory of what the price of something should be. And even if inflation is only 2%, the price level is way more than that. So, households still experience this.

Paul, I decided to be healthy yesterday. Is that right?

And I was going to buy some fancy wildcaugh salmon.

Okay. the price is X above any recollection I have.

So you that's the inflation report,

right? And that's what I mean, right? The price level. You're remembering that salmon should cost a certain price and it doesn't. It might only be 2% more than it was a year ago, but it might be 10% more than it was 3 years ago. So you know, the price level is what households feel. That's what all of us feel on a daily basis.

Feel that.

They do. They just can't do anything about it. They can't go back and undo price increases from two, three, four years ago. What they can influence is what the rate of change will be going forward. And so that's why they focus on inflation rather than the price level.

Paul, get another question in here. 2-year yield comes in right now 4.1823%. Only Bloomberg surveillance goes to four decimal points.

Oh boy, there we go. And it's not just today. We still have another inflation report. We still have another payrolls. there's more data that the Fed will be able to see and that will presumably influence what they're doing.

You would think so. I suspect that the the reaction to today's data is likely to be overdone in the grand scheme of things because we have these other numbers. If the Fed were meeting next week, if this were the last word, then that would be one thing, but it isn't. And I expect that the market will respond. You know, in shorthand terms, the key number to watch is the core CPI month over month. And if it's 3/10en of a percent or higher, the market will price a rate hike.

And if it's 2.2%, 2% month over month or lower. It won't there's another print between here and

here's the advantage. Eric Winterrad with us chief economist alliance burn senior coming up on this report for America futures eb up a little bit I should say just a slight lift futures up 29 NASDAQ up 8/10en of a percent it advances VIX 15.35 in the yield space 4.64% 64% on the 10-year 30-year bond comes in from a 522 to a 5.20. But what you watch is that Fedfriendly 2-year yield to four decimal points for those don't write on the freeway folks. 4.1802 uh% but always anticipated after that anong report.

We shall see. This is breaking news from Bloomberg.

And after an unexpected decline in June, consumer prices rose modestly in July, up a tenth of a percent after dropping 4/10en of a percent in June. That is right in line with estimates. Core CPI, which excludes volatile food and energy, uh up 2/10en of a percent for the month after remaining flat in June. Again, right in line with estimates. Well, we've got year-over-year CPI uh rising 3.4% after increasing 3.5% year-over-year in June.

Again, right in line with those estimates. And taking a look at core CPI uh year-over-year, coming in up 2.5% uh a little bit softer than the 2.6% we saw the prior month. And again, right in line with economist estimates. An early July decline in gas prices looks like it kept a lid on overall inflation despite a bit of a bounce later in the month. So once again, CPI month overmonth coming in up a tenth of a percent year-over-year uh 3.4%.

So still price pressures remain above the Fed's 2% target and stocks um remaining higher here. Futures a little changed after this report. Tom and Paul

boring. So it came in

pretty much. Thank you so much. Came right in on target, but the market reaction is there. Equities pull back a little bit. up 29 on futures up 22 right now and we do get Paul some yield movement here 10-year yield comes in two basis points I think people were sort of looking for worser

that if you have to go to Dartmouth to use that word economic concept but I think they were looking worseer and it came in boring and that it's boring price up yield down

that's fine Eric it seems like uh inflation is kind of coming in line with expectations no movement here. Again, we don't really know how the Fed's going to look at this, do we?

Yeah. This leaves the ball in play, right? This doesn't really change the situation. We're running 210 of a percent month overmonth. It was actually 215. I know that you were going to a lot of decimals on on the numbers. I'm going to use decimals, too. Um, so really a a 2.2, not one that rounded up or down. Um, it leaves you sort of uncertain. It lets the Fed, you can make the argument either way. You know, when you look through the details of this, and obviously there's a lot more to do on it, it looks a little bit more encouraging than the headline.

Shelter inflation was only onetenth of a percent month overmonth for the second consecutive month. We think there is more decline coming there as the as rent prices slow, as housing prices have slowed their increase. Uh so that's encouraging. Going the other direction, medical care services bounce this month. So there's always some back and forth in there. Um but net net, we've landed at the same place where we started 5 minutes ago.

And as Tom correctly said, we're going to spend the next, you know, however long it is analyzing this when he did it in one word, which is boring. Um, you know, it's it's le