UBS on core CPI drop The surprises relative to our expectations in this month’s release were largely in core prices where transportation services, communication services, and lodging away from home were all well below our projections. These are all categories that tend to be volatile (and even more so with the decline in CPI price quotes since April of last year), so we generally suggest paying little attention to them when thinking about the longer run-trend in inflation. That said, even accounting for these categories and the issues with seasonal adjustment, this was not a strong CPI and is consistent with our view that last month was likely the peak for US inflation.(zerohedge)