Nonfarm payrolls beating expectations has strengthened the view that the U.S. economy remains resilient. Now, all attention is shifting toward the upcoming CPI report, which could heavily influence the Federal Reserve’s next decision.
If inflation comes in hotter than expected, the Fed may keep its hawkish stance and leave the door open for a rate hike. That could push Treasury yields and the dollar higher while creating pressure on stocks and gold.
However, a softer CPI reading could give the Fed enough confidence to hold rates, supporting risk appetite and potentially lifting equities and precious metals.
My view? A hold looks more likely than a hike, but CPI could change the market narrative quickly.
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