📈 CPI Predictions

This is how I think CPI will come out.

CPI Readings

First let’s ground on CPI and what we have seen in the past.

You can see that since the start of 2024, inflation has ticked up.

What we are looking for is a number significantly lower than last month to show that inflation truly is under control and we can safely cut interest rates.

CPI Prediction

One trick I like to use that typically correlates with CPI performance is tracking oil and gasoline prices and how they have changed over the last month.

You can see that between the period that this month’s CPI will represent, we saw a 6% drop in crude oil prices.

This is good news and points to a potential light CPI number to come.

Looking at gasoline, we see a similar story. This time it is a 10% drop.

This gives me some confidence going into CPI. It doesn’t mean that CPI 100% is going to come in lower than expectations, but it is a back of the envelope way to estimate CPI that has worked for me in the past.

I walk through additional indicators of CPI and how I am playing my positions going into CPI in the video below: