QI TAKEAWAY — We are excited to have run the correlation between Truflation, at 2.22% YoY, and the CPI, which is lagged and last printed at 4.0%. At 0.97, we’re even more confident in last week’s Quill, which settled the inflation debate. Remain positioned to profit as the data continue to reflect the disinflationary impulses that will drag the CPI down to its “TRU”-ly previewed level.
- Since 2012, Truflation has had a 0.97 correlation with CPI, and the former’s latest 2.29% print suggests CPI is headed back to 2%; the 2m, 3m, and 6m annualized rates for supercore are between 4-5% which gives cover for more tightening, but they are decelerating quickly
- In June’s Chicago PMI report, New Orders and Inventories both crashed below the 40-line, flagging cratering supply and demand; this has happened 27 other times in data back to 1967, 25 of which were in recession, and the other 2 one month after recession had ended
- Since peaking at $62 billion in March 2021, real consumer spending on cereal is down to $55 billion, the lowest since 2019; General Mills’ stock taking a hit after the CEO’s comments on consumer price sensitivities speaks to the broader disinflationary headwinds in the economy