Markets with Megan

In today’s episode, Verdence CIO Megan Horneman, breaks down the latest Consumer Price Index (CPI) report for October, highlighting the persistent contributors to inflation. Despite a year-over-year headline increase of 2.6%, the core CPI remains high at 3.3%. A key factor? The service sector continues to drive inflation, with services excluding energy up 4.8% from last year. Housing costs, particularly owner’s equivalent rent, are also major contributors, rising 5.2% year-over-year. Additionally, energy utilities in housing jumped by 0.8% for the month, translating to a 3.6% increase over the past year. These trends underscore the “sticky” nature of inflation, with core elements like housing and services keeping pressure on prices even as energy costs decline.

Looking ahead, the Federal Reserve remains focused on inflationary signals, and it’s likely we’ll see another 25-basis point rate hike in December. But with several important economic indicators still to come — including the labor market data, tomorrow’s Producer Price Index (PPI), and the PCE deflator — there’s much to monitor before the Fed makes its final decision. Tune in as we explore the current inflation landscape, what’s driving these numbers, and what it could mean for future economic policy. Don't forget to subscribe, hit the notification bell, and share this episode with friends and family for the latest insights on inflation and market trends!

It's another month and it's the same old culprits that keep the CPI level high. It is Wednesday, ovember the 13th, and we received this morning the reading for the October Consumer Price Index. The reading came in as expected across the board. So at the headline level it rose on a year-over-year basis 2.6%, and then on a year-over-year basis at the core level it's still elevated at 3.3%. Now when I say it's the same old culprits, that's because when you look at the details of what kept this year over year core level high was the service sector. So we saw energy prices come down again energy commodities.

But when you look at the services, you're seeing services X energy rising 4.8% on a year over year basis, slightly higher than last month's 4.7%. When you go to housing, that's rising 4.2% year over year. Again. We've seen a big jump in for the month as well, both in housing and the shelter up four tenths after two tenths last month. When you look at owner's equivalent rent, which has a big contribution to the CPI report, that jumped up again to 0.4% for the month. So year over year that is rising 5.2%. The other big jump we saw was in energy utilities in the housing sector they jumped 0.8% for the month. So on a year over year basis they're rising 3.6%.

So inflation has kind of stalled here. It's what we've seen in some of the inflation indicators. The Fed's watching this. We still think the Fed will go another 25 basis points in December. But though we still get a couple more economic indicator pieces of data before that Fed meets in December, but we still get a couple more economic indicator pieces of data before that Fed meets in December, including the labor market, tomorrow's producer price index and then as well the PCE deflator that we'll be looking at in the coming weeks as well. That's all we have today. If you like this podcast, please subscribe, hit that alarm bell, share with friends, family or colleagues, and if you'd like a history of our podcast, you can go to marketswithmegan fm. Thank you,