Asks about his report 'Reducing Inflation Surprises' and what he tracks.
Jonathan Ferro
John Hill
High-frequency data (like digital prices, daily gas prices) is making the past more certain for inflation readings. Markets reprice earlier.
Asks if this makes data less of a market event or if there are forward-looking components.
Jonathan Ferro
John Hill
There will be forward-looking components, but the market reprises earlier and earlier. The Fed is also using this data.
Asks how important the oil story is for inflation given Middle East risks.
Annmarie Hordern
John Hill
It's essential. A 10% move in WTI is worth about 15 bps in headline CPI, and it gets larger non-linearly. It's one of the biggest macro stories.
Asks if the economy is more vulnerable to an inflation shock now than post-COVID.
Jonathan Ferro
John Hill
Yes, we are more vulnerable. Post-COVID had a labor supply shock. Now supply/demand is closer to balance. Another price shock could feed through differently and reset expectations.