Us inflation exceeds expectations again

The US consumer price index (CPI) rose 8.6 per cent in May from a year earlier, the biggest increase since 1981. There are signs of acceleration, strengthening already weakening inflation expectations. Reflected in assets, US stocks, US debt fell, the dollar index rose sharply, gold withstood the pressure on the dollar, also rose accordingly.

But at the data level,It can be found that the market expectations are actually half right:CPI rose, but the core CPI deviated from CPI.

In terms of statistical meaning, the composition of CPI includes more categories of high volatility such as crude oil prices, while core CPI and PCE give less weight in energy and other aspects.

This also reflects the plight of the US economy, where high inflation, the world's largest consumer, has begun to curb spending power, leading to internal divisions between energy, food and consumer prices in inflation data. Not only that, with high inflation, the savings of American residents have been exhausted, which is close to the lowest level in the same period in history, and the future spending power is severely limited.

Why is the data differentiated? Cost!

In terms of data items, housing and energy are still the biggest driving force for CPI.

Among them, as the most important component of CPI, US home prices rose 0.6% month-on-month in May, driving CPI up 0.19% from the previous month, significantly pushing up the level of inflation in the United States.

But unlike the market consensus, VIP believes that the trend of house prices depends on monetary policy and income expectations. As income expectations fall and liquidity tightens, pressure on US housing soars. At present, US real estate prices are in the stage of high consolidation, but the trading volume has already shown a red flag.

However, although there is a tendency for real estate prices to burst, compared with house prices, the pressure of rents on inflation is not to be underestimated. Us rents remain strong, with median one-bedroom rents rising 4.9 per cent year-on-year in the year to June, while two-bedroom rents rose 6.5 per cent year-on-year.

On the other hand, the high price of crude oil, which has been widely criticized, has led to a continued surge in travel costs. For now, US crude oil inventories continue to decline, and there is a risk of progress and deterioration in the future.

First of all, the overall supply and demand of crude oil is tight, and since nearly half of the decline comes from consumer demand such as travel, the price of crude oil is extremely flexible.

On the other hand, as Europe and the United States generally enter the peak season of travel. Marginally, it will increase the demand for crude oil.

In addition, in order to stabilize oil prices, the United States and IEA have repeatedly announced the sale of crude oil reserves. In terms of size, the IEA+ US released 300m barrels of reserves, spanning from March to September. The current selling volume is at the level of 1.33 million barrels per day.

But the problem is,Although the summer demand season ends with the arrival of September, the planned strategic reserve sell-off will also end.. In the current period, the strategic reserve of crude oil in the United States is already low. It is doubtful whether there are any new selling plans in the future. Therefore, I am afraid that the end of the summer vacation will not change the tight supply and demand situation of crude oil.