This is the market forecast for the CPI announced at 8:30 PM tonight:
- Overall inflation (CPI): Expected to rise from 2.4% (previous period) to 2.6%.
- Core inflation (Core CPI): Forecasted to remain unchanged at 3.3% compared to the previous period.
If core inflation exceeds 3.4%:
This will be the first time core inflation has increased for 2 consecutive months since September 2022, a concerning signal indicating that price pressures remain persistent, forcing the Fed to consider the pace of interest rate cuts.
This occurs in the context of the market having lowered expectations regarding the Fed's interest rate cut trajectory, due to concerns that President Trump's tax and trade policies might increase inflationary pressures. Currently, the market only predicts that the Fed will cut rates by less than 0.25% in the next 2 meetings, a significant reduction from the 0.75% expectation last month.
If core inflation is lower than expected:
A figure lower than expectations will bolster the likelihood that the Fed may continue to cut rates by 0.25% in December, consistent with the statement last week from Chairman Jerome Powell that current data shows the Fed is getting closer to the 2% inflation target.
#TrumpSeeksQuickEndToIranWar $TRUMP
- Overall inflation (CPI): Expected to rise from 2.4% (previous period) to 2.6%.
- Core inflation (Core CPI): Forecasted to remain unchanged at 3.3% compared to the previous period.
If core inflation exceeds 3.4%:
This will be the first time core inflation has increased for 2 consecutive months since September 2022, a concerning signal indicating that price pressures remain persistent, forcing the Fed to consider the pace of interest rate cuts.
This occurs in the context of the market having lowered expectations regarding the Fed's interest rate cut trajectory, due to concerns that President Trump's tax and trade policies might increase inflationary pressures. Currently, the market only predicts that the Fed will cut rates by less than 0.25% in the next 2 meetings, a significant reduction from the 0.75% expectation last month.
If core inflation is lower than expected:
A figure lower than expectations will bolster the likelihood that the Fed may continue to cut rates by 0.25% in December, consistent with the statement last week from Chairman Jerome Powell that current data shows the Fed is getting closer to the 2% inflation target.
#TrumpSeeksQuickEndToIranWar $TRUMP