It’s CPI week in the US. [Insert ominous cliché]

Wednesday’s release isn’t the last inflation update the Fed will see before the next policy gathering. That’s PCE prices on April 26. But it’d be helpful, to put it mildly, if CPI would at least feign cooperation for a month or two.

The last two CPI releases weren’t great from the Fed’s perspective. Core price growth ran 0.4% on a month-to-month basis during January and February, inconsistent with the effort to cajole the 12-month print back to target, let alone convince it to stay there.

This week’s release is expected to show the core gauge rose 0.3% last month. With apologies to… I don’t know, optimists, I guess, an objective reading of the figure below suggests there hasn’t been any real, definitive progress on these MoM core prints since ~Q4 2022.

If we’re honest, the disinflation narrative as it relates to the MoM core CPI series since late 2022 is an exercise in glorifying four prints (June, July, August and October of 2023) and downplaying all the rest.

To be fair, the YoY pace has nearly halved from the highs. And it probably receded to a new inflation era “low” in March. But “low”‘s a misnomer. Even in an undershoot, annual core price growth would be a mile above target. Consensus expects 3.7%.

Do note (and this is funny, assuming you’re the kind of tortured soul who looks to monthly macro releases for laughs): Consensus for this week’s release looks exactly like consensus for the prior month’s update. Then, as now, consensus was looking for 0.3% on the MoM core print and 3.7% YoY. We’re just rolling these guesses forward after overshoots.

It’s completely unrealistic to expect regular people (i.e., Main Street, middle-income Americans and particularly the working-class) to celebrate a decline in core CPI from 6.6% to 3.7%. Think about this from the perspective of a four-person household earning the median national income: Prices are still rising nearly 4% on a 12-month basis almost two years on from a spell of 6% annual increases.

If you’re trying to win a US presidential election with those kind of inflation dynamics, unemployment better be nonexistent and the other party’s candidate better stand accused of seven-dozen felonies. (Fortunately for Joe Biden…)

The CPI release comes hot (or hopefully cool) on the heels of another blockbuster payrolls report in the US, where the economy’s adding an average of 276,000 jobs per month.

It’s becoming very difficult to square the incoming macro data with Fed cuts commencing from June. There’s still time, but not a lot.

If i) March CPI comes in warm, ii) the retail sales report due April 15 looks solid and iii) the advance read on Q1 GDP (due April 25) is as robust as the balance of last quarter’s data suggests it might be, the Committee may use the May FOMC meeting to telegraph a disinclination to cut in June.

Speaking of policy meetings, minutes from March‘s FOMC meeting are due this week. Markets will also hear from at least seven Fed officials. Traders will be reading, watching and listening for additional evidence to support receding rate-cut pricing for 2024. Last week’s Fed banter was noticeably cautious on an “early” start to cuts, although Powell largely stuck to the script during an event at Stanford.

Also on the data docket in the US: The NY Fed consumer survey (recall the last release showed a big uptick on the medium-term inflation expectations series), NFIB, PPI and the preliminary read on University of Michigan sentiment for April (the context there is the dramatic upward revision in last month’s final reading versus March’s preliminary release). Earnings season in the US gets going on Friday.

The US isn’t the only macro-policy game in town this week. The ECB meets, China releases key data and the BoE’s poised to deliver the results of a review aimed at determining what went wrong with the bank’s inflation forecasts over the last three years. For more on those events, see my global preview here.