Economists skeptical of latest inflation numbers

Carl Quintanilla (Anchor) 00:00.190

welcome back stocks are higher after the cooler than expected inflation data this morning but some questions now being raised about how much we might trust this print our steve liesman is looking into that i'm seeing the bruce ellis response this morning dude that was one flawed

Steve Liesman (Senior Economics Reporter) 00:14.670

report that's one of my bullet points here carl and you guys were just talking about this stocks loving this cooler than expect expected inflation report the bond market and economists highly skeptical with many saying changes to the data gathering process they started gathering

Steve Liesman (Senior Economics Reporter) 00:29.790

data mid month distorted the numbers RSM saying as carl just quoted dude that was one flawed report morgan stanley a little more perhaps politics saying this was a noisy print making it difficult to draw strong conclusions pantheon says data collection issues mean trend will

Steve Liesman (Senior Economics Reporter) 00:45.990

only be clear in december the ten year went into this number around four twelve rally sold off it is now highly unchanged right around four eleven four twelve so some skepticism as well in the ten year and the two year yields fed probabilities also pretty much unchanged january

Steve Liesman (Senior Economics Reporter) 01:04.350

probability of the next rate cut still twenty six percent a little bit higher for march kind of unchanged for april and a point higher at eighty six percent for june so the market the fed funds market not building in anymore effect from the fed from this report housing inflation

Steve Liesman (Senior Economics Reporter) 01:20.630

emerged as a flashpoint of debate here the monthly change now point one three from point three before the number raising a lot of eyebrows among economists but blackstone steve schwarzman telling becky quick this morning the company is seeing much lower rents in the real world

Steve Liesman (Senior Economics Reporter) 01:35.950

and they're not coming in evercore is on the other side of this debate said the report could still matter for the fed they wrote while the fed will be cost about potential technical issues with this print related to the shutdown this report gives some ammo to the doves well i'll

Steve Liesman (Senior Economics Reporter) 01:49.870

have a chance to talk tomorrow to john williams new york fed president exclusively at eight thirty AM and ask him questions about how he read this this report but you know what guys i think this interesting the bond market they were not impressed here stocks maybe they're

Steve Liesman (Senior Economics Reporter) 02:05.230

looking for a reason to rally right

Sarah Eisen (Anchor) 02:07.800

i mean i guess we have heard from places we've heard from ivy zelman for instance really notable housing analyst and economists and and this is part of stephen myron 's point as well the fed governor that that shelter is just really lag impact you know from from all of the

Sarah Eisen (Anchor) 02:23.520

tighter fed policy and that they expect lower shelter prices to start showing up and you do see that three percent higher shelter price and that looks better than where it's been

Steve Liesman (Senior Economics Reporter) 02:33.440

i i think you're right sarah and and myron 's been on this we were on story a year ago when we thought shelter prices should be coming down and they weren't showing up in the CPI so it's a big deal i think the question is this you want to know what's happening more specifically

Steve Liesman (Senior Economics Reporter) 02:48.750

in the service sector X housing you don't really have that data look this could be a great development and maybe the stock market is right i'm not here to tell you it's wrong i'm here to show you that the bond market has a more sort of a little more scant at this at this number

Steve Liesman (Senior Economics Reporter) 03:03.710

right now and economists are saying they're not really ready to draw huge conclusions from this number because of as i read it this morning live on air sarah i didn't know how to read it there were all these dashes all over the place so it's a complicated report i guess the BLS

Steve Liesman (Senior Economics Reporter) 03:20.070

did the best it could with the time it had given the shutdown didn't didn't end until the middle of the month

Sarah Eisen (Anchor) 03:25.110

yes it was frustrating i went to my normally normal grocery basket of goods to try to find out pricing and wasn't there thank you steve

Steve Liesman (Senior Economics Reporter) 03:32.630

thanks sir