# CPI Tomorrow

Keep an eye on the CPI numbers being released tomorrow Thursday 8:30am EST. The next 2 CPI numbers will be the beginning of the turning point for US markets. After analyzing a variety of economic indicators and factors, I believe that the recession in 2023 will be relatively shallow, and that the US economy will rebound in the second half of 2023.

One of the key reasons for this is the expectation that inflation will decrease faster than previously thought. This can be attributed to a number of factors, including the perceived expectation of a recession, as well as the reopening of China and the return of global supply chains to normal. These factors will work together to help ease price pressures and keep inflation in check.


**Transportation costs directly effect inflation, which have been materially falling since the beginning of 2022. Energy pricing has largely stabilized in the past few months.**

Another important factor is the elevated level of global money supply that has been seen in the wake of the pandemic. This money is still in circulation, and it is likely to continue to support economic activity and help boost growth.


**Unrelentless printing of money by central banks. Since COVID, USA has doubled the money supply. Once the money is in circulation, it is very difficult to clawback.**

**Bank Printing = Higher Asset Prices**

Additionally, it's worth noting that inflation only tracks the past year, so if prices while elevated remain the same over a year, inflation is zero, which means that it would not be enough to push the economy into a recession.


**Monthly CPI Chart. Since July 2022 monthly #s are significanly lower than the prior 12 months. If prices stay level to where they are today, by July 2023, year over year inflation will be around 2%.**

CNBC: Zelman report that watches housing / rent says decelerating +50 bps from +75 bps last month. Will remain elevated for 1.5 years. 4% rent inflation 2023 and double digit declines on housing value.