Even if tonight’s CPI comes in at the expected 0.3%, I still won’t take it as a bullish signal.
Reuters and CNBC’s forecasts on November 10 were: October CPI up 0.3% month over month, core CPI up 0.2%, versus 0.6% and 0.3%, respectively, in September. The Bureau of Labor Statistics won’t release the year-over-year figures this time because prices weren’t collected during last October’s government shutdown. The 3.9% and 4% figures circulating online are interpolations estimated by institutions, so using them to judge whether the data beat expectations gets us off on the wrong foot.
The only figure that will really determine direction is that one decimal place in the month-over-month reading. The probability of a 25-basis-point rate hike in December is already around 80%. Bank of America economists think that unless the monthly figure comes in as low as 0.1%, it will be hard to stop that December move. A 0.2% reading would simply mean things haven’t gotten worse; 0.3% would confirm the bad news.
So I’m not adding to my position before the data comes out. If the monthly figure really does come in as low as 0.1%, I’ll consider following through. Waiting half an hour to see the result won’t mean missing anything.
#CPIOutlook, December Rates Face a Crucial Test $BTC
Reuters and CNBC’s forecasts on November 10 were: October CPI up 0.3% month over month, core CPI up 0.2%, versus 0.6% and 0.3%, respectively, in September. The Bureau of Labor Statistics won’t release the year-over-year figures this time because prices weren’t collected during last October’s government shutdown. The 3.9% and 4% figures circulating online are interpolations estimated by institutions, so using them to judge whether the data beat expectations gets us off on the wrong foot.
The only figure that will really determine direction is that one decimal place in the month-over-month reading. The probability of a 25-basis-point rate hike in December is already around 80%. Bank of America economists think that unless the monthly figure comes in as low as 0.1%, it will be hard to stop that December move. A 0.2% reading would simply mean things haven’t gotten worse; 0.3% would confirm the bad news.
So I’m not adding to my position before the data comes out. If the monthly figure really does come in as low as 0.1%, I’ll consider following through. Waiting half an hour to see the result won’t mean missing anything.
#CPIOutlook, December Rates Face a Crucial Test $BTC