Consumer Price Index (CPI) - January, 2023

The experts expected the Consumer Price Index (CPI) to not rise in this report and forecast a 6.5% print. This would mean CPI dropped 0.6% from the previous 7.1% print.

That would be the sixth straight month of slowdowns in the annual pace of inflation, which peaked above 9% in June. And it would bring the inflation rate back to its lowest level in more than a year, since October 2021.

This CPI print came in at 6.5%, which is in line with expectations. While it seems inflation is cooling. CPI is a very skewed metric and one of the metrics that the Federal Reserve does not put much weight into. CPI is calculated using the price of used vehicles such as a G-wagon or a yacht.

At the same time, it does not use the price of eggs and meat in the calculation. There is an egg shortage worldwide, and people are bullish that a skewed metric is lower.

This CPI print and the days leading up to it are bizarre. First, we had every notable bank say they expect this month's CPI to be either 6.5% or lower. It seems very odd that every bank agrees with each other. Second, President Biden announced on the 11th of January that he would be hosting a press conference an hour after the CPI print was released.

The president and the Whitehouse know the CPI print days in advance. Just the way the market rallied has me on my toes, and I would caution for the coming days.