Inflation Update

What’s in Today’s Report:

• Inflation Update (Why the Soft CPI Is Likely Understating Inflation)

Futures are modestly lower mostly on digestion of the week’s rally, but also on some incrementally negative COVID policy headlines.

Over the past 24 hours headlines of possible COVID related travel bans to Florida and negative COVID testing requirements for interstate air travel weighed on sentiment.  Both would be economically negative (and the later a total disaster for airlines).

Economically, the only notable data was UK GDP and UK Industrial Production, and the results were mixed.  But, neither number is moving markets.

Focus today will be on any incremental COVID policy headlines, and if there’s traction on the any travel bans to states or it looks like people will need negative COVID tests to fly, that will hit stocks.  Away from COVID policy, we get Consumer Sentiment (E: 80.9) and have two Fed speakers: Williams (10:00 a.m. ET) and Daly (3:00 p.m. ET) but unless there’s a major surprise, they shouldn’t move markets.