📈 CPI Crushes

The stock market shifted yesterday.

CPI Results

CPI came out yesterday and the results were extremely bullish. We saw inflation fall off a cliff.

Core CPI came in below expectations at 0.2% (expectations were 0.3%) and the inflation rate came in at 0%. Remember that Core CPI excludes food and energy, while the inflation rate includes everything.

Graphically, you can see how important that number was here:

There was fear that inflation was once again on the rise after it appeared to begin dropping, but then started rising in 2024.

This is extremely significant and tells us that inflation is weaker than expected.

Fed Dot Plot

We also received the Fed Dot Plot today, which tells us what each Fed member thinks interest rates will be in the future.

Seven Fed members said one rate cut this year and eight of them said two rate cuts, which is a major departure from the three rate cuts that were previously expected.

This is why we saw some weakness into the end of the day and bonds rising.

Watch the video below for a recap of the economic data and how it changes my outlook of the market: