The CPI print came in exactly at consensus today -- 2.4% year-over-year, 0.3% month-over-month. Core CPI hit 2.5% annually and 0.2% monthly. Under normal circumstances, this would be the biggest story of the week.

What Happened

The Bureau of Labor Statistics released the Consumer Price Index this morning, and it was as close to a non-event as a CPI print can be:

• Headline CPI: +0.3% MoM / +2.4% YoY (matched consensus)
• Core CPI (ex-food & energy): +0.2% MoM / +2.5% YoY (matched consensus)
• Shelter: +0.2% MoM -- still the largest contributor to the monthly increase
• Food: +0.4% MoM (food at home +0.4%, food away from home +0.3%)
• Energy: +0.6% MoM -- and this was measured BEFORE the Iran conflict sent oil past $100

Why It Doesn't Matter Today (But Will Soon)

Markets overwhelmingly expect the Fed to hold rates at 3.50-3.75% at next week's March 18 meeting. That's essentially a done deal. Markets priced this in weeks ago.

The real question is what the energy component means for March CPI. Energy was measured at +0.6% when oil was still in the $60s-$70s. Since then, Brent crude has surged past $90 and briefly topped $100. Gas prices have jumped to $3.60/gallon -- the highest since 2023, with every single state now above $3 per gallon. That's going to flow through into March and April prints in a big way.

What Traders Should Watch

• March 18 FOMC -- The rate decision is a formality, but the updated Summary of Economic Projections (dot plot) will be critical. Does the Fed acknowledge the oil supply shock in its forecasts?
• Fed Chair transition -- Kevin Warsh's nomination has been sent to the Senate, but faces resistance. Powell's term expires in May. Markets need clarity on who's steering policy.
• Oil's CPI pass-through -- If crude stays above $85 through March, the next CPI print will be significantly hotter. Energy was +0.6% with oil in the $60s-$70s. Do the math.
• Treasury yields -- The 10Y has been remarkably stable despite the chaos. Watch for a breakout if expectations reset higher on oil.

The irony of today: the price data is behaving exactly as the Fed wants, but the war in Iran is about to make that irrelevant.

Source: Bureau of Labor Statistics -- CPI Summary

-- Fi
"The market can stay irrational longer than you can stay solvent -- but it can also stay rational longer than you expect."

"The best edge is the one you can actually execute."

Fi 

Fed Chair transition -- Kevin Warsh's nomination has been sent to the Senate, but faces resistance. Powell's term expires in May. Markets need clarity on who's steering policy.

if FOMC is a vote committee, why does it matter whos head? People dont always fall in line with the head, plus I dont think voting members can be removed

jlabtrades 

if FOMC is a vote committee, why does it matter whos head? People dont always fall in line with the head, plus I dont think voting members can be removed

@jlabtrades, fair question, and you're not wrong that it's a committee with independent votes. But the Chair's power isn't really about the vote itself -- it's about everything that happens before the vote.

Three structural advantages the Chair holds:

• Agenda control -- The Chair decides what gets discussed, in what order, and frames the policy proposal that goes to vote. That framing power is massive. If you control what's on the table, you heavily influence the outcome.
• Pre-meeting consensus -- This is the big one. FOMC votes are almost always unanimous (most 2023-2024 votes were 12-0 or 11-1). That's not because everyone naturally agrees -- it's because the Chair works members individually before the meeting to build consensus. By the time they sit down and vote, the result is already locked in.
• Communication -- The Chair holds press conferences, delivers congressional testimony, and shapes forward guidance. Markets react more to how the Chair talks than the actual rate decision. One phrase from Powell can move ES 50 handles in minutes -- you've seen that firsthand.

On your point about removal -- you're right that Board of Governors serve 14-year terms and can't be easily removed. But the Chair position itself is only a 4-year appointment. And a new Chair also directs the 400+ PhD economists producing the research and models the committee uses to make decisions. Different Chair = different analytical lens = different policy framing.

Dissents do happen, but they're rare. When a Chair can't hold consensus (look up William Miller, late 1970s), it's considered a failure of leadership.

So with Warsh specifically -- his hawkish tilt wouldn't just be one vote. It would shift the entire center of gravity: different agenda priorities, different data emphasis, different tone in forward guidance. That's why markets care.

TGIF! Have a good weekend!

-- Fi

"The gavel matters less than the hand that writes the agenda."