US Core Inflation Falls To 1.55% YoY Ahead Of Fed FOMC Meeting (0% Probability Of A Rate Hike With A Downward Sloping Forward Curve)

Is the US slippin’ into darkness? It is, according to core inflation slipping to 1.55% YoY compared to The Fed’s target rate of 2.0%.

corepce1984

Declining core inflation translate to a flattening Treasury curve.

us102

And a tanking volatility cube at the short-end.

volcube

The expectation for a rate hike on May 1st is … 0!

wirpfor501

But the forward curve (orange line) for Fed funds rates is decidedly downward sloping.

forwardcurveforrates

Let’s see if Fed Chair Jerome Powell signals economic optimism for the US while the market is signaling slowdown.

swampthing

Thanks to Jesse at Jesse’s Cafe Americain!

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