Inflation is more than one published series

macroPublished 16 October 20261 min readmacro, fixed income

Key points

• Consumer prices, producer prices and surveys of expectations are different objects.
• Energy and tax can move a headline without describing the path policy is aimed at.
• This page does not display a current inflation reading. There is no live feed.

What is going on

Consumer price indexes track a basket of goods and services bought by households. Producer prices track earlier stages of production. Market and survey measures of expectations track what people say, or what prices imply, about later inflation. Disinflation is a slowing in the rate of increase. Deflation is a fall in the price level. They are not synonyms, and neither is a forecast this desk is willing to invent.

Why it matters

Assets do not respond to “inflation” in the abstract. A bond is a claim in nominal currency. A commodity is a good with its own supply. An equity is a claim on profits that may or may not keep up with costs. An inflation-sensitive asset is one whose cash flows or discount rate move with a stated price series. The sensitivity is a hypothesis until the series and the holding are both named.

What to watch

Read the index definition, the base period and the revision policy from the statistical office or the central bank that publishes it. Separate administered prices and energy from the rest before deciding that the whole basket has changed character. Expectations can move because a market is thin, not because households have changed their minds.

Risks

A correct description of last year’s basket does not say what the next basket will do. Policy can react to a series the investor is not watching. This note gives no current rate, because printing one without a cited release on the day of reading would be a fiction.