Is US Inflation Ebbing or Another Headfake?

From scotiabank.com

US CPI significantly undershot expectations and drove a massive rally in a rare undershoot of inflation nowcasts and everyone’s forecasts. The undershoot to the Cleveland Fed’s nowcast was the biggest since it became available (chart 1). The undershoot by core CPI compared to the same nowcast source was the biggest since the start of the pandemic (chart 2). My own tracking was also too high, so misery abounds this morning but with plenty of company apparently. The two-year yield dropped off a cliff and fell by 27bps with the 10-year yield declining by 22bps in the aftermath. The dollar depreciated by about 2.2% ... (full story)