Baxia Markets
May 12, 2021

USD - Core CPI m/m

What is it? 



In basic terms, Core CPI (Consumer Price Index) measures the difference in prices of goods and services. It is important to note that Core CPI excludes food and energy. One factor that makes Core CPI an important statistic is that it looks at price change from the consumers perspective. It is a crucial way to measure changes in inflation and purchasing trends. The m/m means month to month. 





What are the Expectations for the USD - Core CPI m/m?



With this release right around the corner, we take a look at what the expectations are for this release and what it means. The expected figure is 0.3%. This means that prices of goods and services excluding food and energy will increase 0.3% over last month. 



Professional Insight



“There could be a knee-jerk reaction in the market,” said Mark Zandi, chief economist at Moody’s Analytics. “The things I would look at are rent growth and healthcare costs,” he said. “I would expect rent growth starts to pick up. Health care will likely remain low.” Zandi added that one area he expects to see a big surge is used cars, with prices increasing 70% from a year earlier.  Zandi also said that the Fed would take a higher number in stride and the sudden rise should be transitory.



What happens if...



We see a higher number than 0.3%? That is typically a good sign for the US Dollar. However, if the number is way higher than expected, then there could be negative implications. 



What happens if...



We see a lower number than 0.3%? That is typically not a good sign for the US Dollar. We also do not want to see a number that is way lower than 0.3%, especially not in the negatives as we all know deflation is not ideal in the long term. 



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