The inflation report for the month of February was hotter than expected at 3.2% YoY. A more granular analysis, like the one shown below, shows that inflation composition has changed; during 2021 and 2022, a big percentage of price changes came from goods, Energy and Food. Now, it’s almost entirely about services, and within services, Transportation. The bottom line is that inflation continues to be sticky, and the Fed will have a tough time justifying several rate cuts if prices continue to rise above the 2% mark. Despite that fact, equity indices rose yesterday pushed by tech stocks (of course), while Bitcoin ETFs experienced their biggest daily inflow ever with $1Bn. Gold and silver keep going up as well.
Inflation composition has changed