Welcome to the DC Today, your daily market synopsis of the Dividing Cafe, brought to you every Monday through Thursday to bring you up-to-date information and perspective on financial markets.

Hello and welcome to another day of the DC today. It is the Wednesday edition. It was a weird day in markets.

I don't want to say it was boring. I don't want to say it's exciting. Kind of somewhere in between, but definitely weird.

Let's start with the economics, get to kind of the bigger, important stuff that took most of my morning, my early morning, and then the market day itself was what it was.

The CPI number came out, and it did come at 4.9% year over a year.

Analysts have been expecting 5%.

And so a tiny bit lower than expected, and on the lowest level we've seen now since April of

2021. So the lowest year over've seen now since April of 2021.

So the lowest year-over-year number in a full two years.

And so I just am going to give another caveat.

I expect a lot of you know where I'm going,

but it's profoundly true and accurate, what I'm about to say, and important.

And that is that the shelter component into CPI came in at 8.1% year over year.

That represents 34% of the CPI waiting.

I believe the owner's equivalent rent was 8.8% of that and the rents were 8.6% of that.

So it was blending to 8.1, which at a 40, excuse me, 34% weighting means it was adding 2.75% to the 4.9 inflation rate.

So without it, if shelter was zero, hypothetically, you would have had a 2.25% inflation rate.

And I'm willing to say that the shelter inflation wasn't zero, because I'm partially willing to say it may have been negative 2%,

negative 1%. It could have been positive 1 or positive 2 as well. There's a lot of complexity

and challenge. But again, as long as we're still a month or two or whatever it is away from this

lag effect catching up of

the rents and leases that were effectuated a year ago and were that far disconnected from the

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