Dec 14, 2022
Yesterday’s US CPI numbers came in softer than expected with 7.1% in November, down from 7.7% in October and the lowest level since December 2021. Without wanting to spoil the party of the “pivoteers” believing the Fed will slowdown its restrictive monetary policy, we note that while the so-called sticky inflation, excluding food, energy and shelter, is coming down, it is still at a four decade high. We also note the labour market remains tight and service inflation is still increasing. We believe the Fed will be very careful before sending out dovish messages to financial markets. It will be therefore interesting to see what comes out of the final FOMC meeting of the year today. At ECP, we believe it is too early to change our portfolio positioning.