October CPI Inflation

Headline CPI exceeded expectations substantially, with m/m 0.9% vs. 0.6% expected. Core was 0.6% vs. 0.4% expected (Bloomberg consensus). The persistence in the gap will depend in large part on oil price’s evolution. Year-on-year core matches levels last seen in 1991; but still far below the 1970’s.

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Macro Implications of BBB and IIJA Passage

We are still in the process of determining what’s in the Build Back Better (BBB) bill, but it approximates what is currently discussed, it in conjunction with the Infrastructure Investment and Jobs Act (IIJA) will not likely lead to much pressure in credit markets and upward pressure in prices, given it is largely paid for. Here (while we wait for the CBO) are Moody’s Analytics projections (as of 11/4).

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