Did anyone else need to bust out the snow shovel after yesterday’s storm? I needed to remind myself twice that it was August. Temps stayed cool enough that there were a few mounds of hail scattered around the back yard still this morning. Crazy stuff.
Yesterday’s PPI showed that wholesale inflation is also cooler than anticipated, with a 0.1% rise in July and a decrease YOY down 0.5% to +2.2%. Today’s CPI showed retail inflation up 0.155% MOM and 2.9% YOY. At 45% of the calculation, shelter costs are still keeping the Consumer Price Index elevated. Of course that calculation won’t change until interest rates drop; so we find ourselves at a bit of a standstill based on today’s report.
Fortunately, shelter only accounts for 17.6% of the PCE, and Personal Consumption Expenditures is the Fed’s favorite inflation report. PCE will next be released on August 30, giving the Fed three weeks before their next meeting to deliberate what to do. Survey says a 37.5% chance of a 0.50% rate cut and 62.5% likelihood of a 0.25% drop. Either of course will be very welcome. 
