The focus is on core PCE showing a cooling

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The focus is on core PCE showing a cooling
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An autopsy on yesterday’s price action is useful. We got a hot mess in the news and on the charts yesterday.

Outlook Minneapolis Fed Kashkari said the Fed has not ruled out additional rate hikes. Then we got a mixed but relatively upbeat consumer confidence survey that showed a willingness to keep spending and the expectation that rates will, indeed, go up. The 10-year yield rose 8 points to 4.54% after the 5-year auction went for 4.553%, over the pre-auction 4.540%. Trading Economics reports “An earlier offering of $69 billion in two-year notes also saw tepid demand.

41% of this increase, while housing accounts for 0.37%. That’s why we have to look at non-housing services, too. See the Fed’s “sticky CPI prices less shelter.” As of May 15, the April number was 3.23%. Bottom line, the NY Fed’s multivariate chart looks hopeful for a nice dip this time. But the Fed’s sticky prices less shelter is not improving.

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