CHART OF THE DAY: Q118 Forecast = Disinflation

But now what? 

As you can see in today’s Chart of The Day (slide 27 in the Hedgeye Macro deck), Bloomberg Consensus Estimates vary from ours in Q118. Consensus is simply straight-lining what was recently reported in JAN as the forecast for the quarter.

Our forecast has more than a few callouts to make:

1. Within our Q1 forecast we have FEB as the low monthly forecast because that’s when base effects are steepest
2. In Q2 and Q3 our inflation forecast accelarates again…
3. Then our outlook for inflation slows again in Q4

Are those too many changes in direction to risk manage? Does Mr. Market owe us low-vol and linearity? Of course not. Moreover, if this is all Macro Tourists want to trade on every day, why not talk about it with some precision?