August payrolls came in much stronger than expected, showing that the labor market is still holding up. That has already increased expectations that the Fed could stay aggressive on rates.
Now all eyes are on CPI.
Inflation is still above the Fed’s 2% target, and the latest PPI numbers added more pressure. If CPI comes in hotter than expected, I think we could see Treasury yields and the dollar move higher, while stocks, crypto and gold may face some selling pressure.
But a softer CPI print could change the mood very quickly and bring risk assets back into play.
For me, CPI is the key trigger now.
What’s your call — Fed hike, hold, or a surprise market reversal? 👀
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