Annual inflation rate hit 2.3% in April, less than expected

Key Concepts:

• Consumer Price Index (CPI): A measure of the average change over time in the prices paid by urban consumers for a basket of consumer goods and services.
• Headline CPI: The CPI for all items.
• Core CPI: The CPI excluding food and energy prices, which tend to be more volatile.
• Year-over-year (YoY): A comparison of a metric to the same period in the previous year.
• Inflation: A general increase in prices and fall in the purchasing value of money.
• Federal Reserve (The Fed): The central bank of the United States.

CPI Data Release Analysis

• Headline CPI (Month-over-Month): Increased by 0.2%, which was 0.1% lower than expected.
• Core CPI (Month-over-Month): Increased by 0.2%, also 0.1% lower than expected.
• Headline CPI (Year-over-Year): Increased by 2.3%, 0.1% lower than both expectations and the previous reading. This represents a fresh four-year low.
• Core CPI (Year-over-Year): Increased by 2.8%, matching both expectations and the previous reading. This also represents a four-year low.

CPI Index Values

• CPI Index (1913 Base): 320.795, a new all-time high.
• Core CPI Index (1957 Base): 326.43, another all-time high.

Market Reaction

• Yields are moving down slightly, indicating that the market perceives the lower-than-expected inflation data as progress.

Rick Santelli's Commentary and Perspective

• Irony of Past Fed Policy: Santelli highlights the irony that the Fed previously acted as if progress was being made on inflation when data did not support it (due to potential tariffs).
• Current Progress: Santelli emphasizes that real progress is now being made on inflation.