CPI cools, but services inflation remains sticky
Headline inflation eased for a third month, yet shelter and core services continue to run well above the Fed's 2% target.
US consumer prices rose less than expected last month, extending a run of softer headline readings. Yet a look under the hood shows the disinflation is uneven: goods prices are outright falling, while services inflation — the category most sensitive to wages — remains stubbornly above 4% on a year-over-year basis.
The real yield channel
For gold, the composition matters as much as the level. Sticky services inflation with falling nominal yields is a bullish combination — it pushes real yields lower without triggering a hawkish repricing of Fed policy.
The Fed's dilemma
Cutting too soon risks reigniting the services component. Waiting too long risks a labour-market crack. The market is currently pricing a cautious easing path, and gold has responded accordingly.
Macro editor focused on inflation, real yields, and global central bank policy.
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