After a busy week for ‘inflation’ indicators (both CPI and PPI rose more than expected), import and export prices rose less than expected in April.
US Import prices rose 12.0% YoY in April (slower than the +13.0% in March and below the +12.3% expected)
US Export prices rose 18.0% YoY in April (slower than the +18.6% in March and below the +19.2% expected)
The inflation indicators, however, remain near decade highs…
Import prices from China have been exploding higher as Beijing appears to be exporting inflation to the rest of the world…
Finally, we note that China’s credit impulse has drastically shrank in recent months. Historically that has been a lead indicator for import/export prices inflation…
If that relationship holds, then we indeed have seen ‘peak inflation’ for this cycle. But have the disruptions in the global supply chain broken this relationship?