In the USA, inflation expectations as measured by the University of Michigan on Friday fell to 2.3%, back to not only where they were at the end of last year, but equalling the lowest level recorded in the 24 years history of the survey. Consumer price inflation meanwhile dropped from 2.0% to 1.9% in April in core (ex food and energy) terms and back to levels last seen in October 2015. Whether looking at wages growth, CPI, the Fed’s preferred core PCE deflation measure or inflation expectations, inflation pressures are currently receding. I doubt this poses a serious challenge to the likelihood of a June Fed move, but beyond this, the (inflation) data dependency of additional tightening is surely paramount.
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For anyone following my Platinum Service it made 42 points on Friday and is now ahead by 583 points for May, having made 1276 points in April, 1335 in March, 1481 in February and 1734 in January. The previous seven months saw gains of 1351, 1971, 1582, 1142, 1782, 1682 and 2550 points respectively. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1750 points.