Yet Another CPI Review

Reviewing October's CPI report and discussing when and how to fade the moves.

Summary

The October CPI release was good news for the Fed, with monthly run rates surprising to the downside and many subcomponents decelerating over the month. However, we do not see this print alone as a game changer – while encouraging, it will take a succession of similar inflation prints and cooperation from a broader array of macro data to move the needle on Fed policy. We discuss how and when to fade outsized moves in rates and particularly equities.