📈 CPI 8:30 AM

This is what you need to know before CPI releases

CPI Tomorrow

We have CPI releasing tomorrow at 8:30 AM and it will certainly move the market.

Here are the expected numbers:

• Core Inflation MoM: 0.2%

• Core Inflation YoY: 3.2%

My Analysis

My expectation is that CPI will come in hotter than expected. There are a few reasons for this.

First, previous low readings for CPI were primarily due to food and energy prices coming down significantly, which is no longer the case.

You can look at stocks like CALM and SFM to validate that food prices are rising. From an energy standpoint, you can see that the price of crude oil has risen since our last CPI report.

Goldman also released a report stating that they expect an increase in airfares and car prices vs. previous report. They are also expecting rent prices to increase and car insurance prices to increase.

Putting all of this together, my expectation is that we come in closer to 0.3% vs. the expected 0.2%.

Market Reaction

If the number comes in hot, I expect equity markets to initially sell off and then potentially rebound. It depends how hot the number is.

I go into detail on my expectations for CPI and how the market will respond here: