U.S. Cost of Living Rises at Fastest Pace in Five Months

The transcript discusses the implications of inflation data on the Federal Reserve's monetary policy, focusing on the roles of doves and hawks. It examines global inflation trends, particularly in New Zealand and the UK, and considers whether deflationary pressures are easing. The conversation also explores the impact of base effects and labor market conditions on inflation, highlighting the importance of core inflation metrics. Finally, it addresses the sources of inflation in the US, emphasizing the Fed's focus on hitting its inflation target rather than the specific sources of inflation.

In what ways do base effects influence the interpretation of inflation data?

Why might the Fed prefer to see inflation coming from services rather than goods?