Thread by @agnostoxxx

CPI Thoughts for Traders with ADHD
#Gothilocks #BigFlip

Just as everyone is cozy that Inflation is last year's story, a brave few have been warning about a pick-up in Inflation.

So lets make it simple:
(KISS = Keep It Simple Shrub)
🧵

https://twitter.com/agnostoxxx/status/1621867141929598976?s=20&t=ECu2ghlrWfvUBcOjELlejQ

- On Jan 24th, the Cleveland Fed Nowcast for JAN was at +0.53% mom
- But on Feb 10th, the JAN Nowcast got revised UP to +0.63% mom
- And we also have now an estimate for FEB and it's +0.68% mom!

Reminder: the DEC print came in at -0.10% mom & got revised today UP to +0.10%!

In summary:
a) Jan vs Dec inflation is UP +0.5% MoM and the TREND is UP
b) If we annualize 0.5% MoM, we get 6% inflation! My maths is bad, but 6% ain't no 2% !
c) The Feb nowcast is also pointing to sticky inflation at >6% annualized ! So Jan isn't a one-off !

The irony is that the CPI may come in at 0.40% vs consensus at 0.5% & all the monkeys will rush to buy the "beat" & squeeze the shorts.

This is what I call "TikTok Investing".

But the importance is that Inflation will show to be stickier than Equities & Bonds are pricing...

And whether the market wakes up to it next week or next month is irrelevant to me.

What's relevant is that I don't want to be on the wrong side of it when it happens...

..because Gothilocks is lurking in the background and she wants blood.

#Gothilocks #Bigflip

ADDENDUM:
Given the upward revision of Dec CPI by +20bps, "they" have set up themselves to "beat" the Jan CPI.
So if CPI Jan consensus is +50bps, then now it will come at +30bps.
The monkeys will rejoice (as detailed above) but sane people will eventually see through it 😉🌳🙏