CPI at 21:30 tonight: two key points.
1. There’s no year-over-year figure this time
Because of last year’s government shutdown, the Bureau of Labor Statistics didn’t have complete base-period data. Tonight, it will release only the month-over-month figure, not the year-over-year figure. The market has lost a familiar anchor, so the impact of a single monthly reading may be amplified—but the data are actually less complete. The consensus forecast for headline CPI is 0.3% month over month. There’s disagreement over core CPI: 0.2% or 0.3%. That’s the real dividing line tonight.
2. A rate hike is already a foregone conclusion; CPI won’t change the direction
After the nonfarm payrolls report, the probability of a rate hike in December was already around 80%. This morning, two Fed officials continued to strike a hawkish tone: Barkin said rates still need to rise, while Goolsbee spoke directly of “inflation getting out of control.” CPI won’t determine whether the Fed hikes; it will shape expectations about whether there’ll be another hike after this one. $BTC
1. There’s no year-over-year figure this time
Because of last year’s government shutdown, the Bureau of Labor Statistics didn’t have complete base-period data. Tonight, it will release only the month-over-month figure, not the year-over-year figure. The market has lost a familiar anchor, so the impact of a single monthly reading may be amplified—but the data are actually less complete. The consensus forecast for headline CPI is 0.3% month over month. There’s disagreement over core CPI: 0.2% or 0.3%. That’s the real dividing line tonight.
2. A rate hike is already a foregone conclusion; CPI won’t change the direction
After the nonfarm payrolls report, the probability of a rate hike in December was already around 80%. This morning, two Fed officials continued to strike a hawkish tone: Barkin said rates still need to rise, while Goolsbee spoke directly of “inflation getting out of control.” CPI won’t determine whether the Fed hikes; it will shape expectations about whether there’ll be another hike after this one. $BTC
