Both annualized consumer and producer inflation decreased in October from 3.7 percent to 3.2 percent and from 2.2 percent to 1.3 percent, respectively, according to the latest data from the Bureau of Labor Statistics, amid a drops in oil prices.
On the consumer side, gasoline prices dropped 5 percent in October and are down 5.3 percent over the past twelve months.
In the producer price index, energy fell 6.5 percent in October.
The 10-year, 2-year spread on treasuries has been inverted for over a year now - usually a reliable recession predictor - but it could be on the brink of normalizing at just 0.38 percent as of this writing.
In the meantime, UBS is projecting the Fed will cut the Federal Funds Rate in 2024 roughly in half to about 2.75 percent, projecting slower growth, higher unemployment and disinflation.
Which is what usually happens historically after peak inflation - consumer inflation peaked in June 2022 at 9.1 percent - as the economy overheats and consumers must curtail purchases.
Annual consumer inflation was already 7.5 percent.
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