Say hello to the External Revenue Service

After US PPI yesterday surprised weaker and the US NFIB small business survey hit a six-year high, partly on hopes for lower inflation ahead, today is all about US CPI. The hope is the data are soft enough to halt the move higher in bond yields, which shrugged off a drop in oil prices yesterday, the rising dollar, falling stocks, and market chatter of a potential Fed hike in 2025. However, rather than the higher/lower monthly gameshow, let’s look at the structural factors at play.