US DATA: Regional Fed CPI Metrics Point To An End To Disinflationary Progress

Regional Fed inflation metrics based on August's CPI report were mixed on a month-to-month basis, but the longer-term trends suggest that overall inflation has bottomed out at an elevated rate.

• The Cleveland Fed's median CPI measures showed relatively steady M/M price changes in August. The overall median CPI measure came in at 0.28% M/M for a second consecutive month, with the Trimmed Mean (16%) ticking up to 0.26% from 0.24%. That brought the Y/Y readings respectively lower for median (3.62% after 3.65%), but to a fresh 13-month high for Trimmed Mean (3.29% after 3.22%).
• The Atlanta Fed's "sticky" CPI metric decelerated to 3.40% Y/Y from 3.43% prior. But the ex-shelter reading saw an uptick to a 13-month high 3.10% (2.95% prior). The sticky core CPI readings mirrored this, with Y/Y ticking down to 3.40% from 3.42%, but ex-shelter rising to a 9-month high 2.90% from 2.83%. The latter fell to 2.1% in April, lowest since 2021, but has been picking up ever since.
• Overall the readings aren't alarming in terms of indicating a significant pickup in broad price pressures since tariffs began coming into effect, however the upward drift at above-2% levels doesn't provide comfort that inflation is on a path to return sustainably to the Fed's 2% target. As the chart below shows, these measures were running below 3% Y/Y prior to the pandemic.