Food for thought

I got a bunch of optimistic analyst reports today, some even going as far as updating their policy rate and inflation outlook, all based on today's favorable inflation print -0.36% mom, which translates into 9.1% yoy.

Before you bring out the party gear, I would like to tell you that the below-expectations figure was entirely driven by food inflation, and offer you the following graph as food for thought:

So despite May's -4.38% mom food inflation print, the volatility of food prices all but ensures that it is way too early to claim that the negative food supply shock is over. In fact, upwards surprises in the coming months are as likely as today's downward surprise...