#cpitestsdecemberrateoutlook
Today's Inflation Report Is the Last Big Clue Before the Fed's December Decision
Markets have mostly made up their minds about December. The October CPI, due this morning, is the last chance to change them.
Here's the setup: the Bureau of Labor Statistics releases October CPI at 8:30 a.m. ET, the final reading before the Fed meets on December 8-9. Economists expect headline prices up about 0.3% month over month and core up 0.2%, a cooldown from September's 0.6% and 0.3%, helped by lower gasoline. The Cleveland Fed's nowcast is a little softer. One quirk: because last year's shutdown left October 2025 prices uncollected, the BLS won't publish a 12-month rate, so the monthly core figure will likely drive the reaction. Meanwhile, stronger October payrolls (165,000 jobs, unemployment at 4.1%) pushed futures-implied odds of a December quarter-point hike to roughly 77% to 80%. Several analysts, including Citi and Natixis, say an in-line print wouldn't necessarily stop a hike, and Monex argues a hike is nearly priced unless CPI or the November jobs report on December 4 surprises sharply lower. Risks to core skew higher from shipping costs, tariffs, and airfares, partly offset by softer shelter.
Why does this matter? Rate expectations have been a main driver of risk assets, including crypto, throughout this quarter. A hotter print could harden hike bets, while a softer one may only trim them.
When the market already leans one way, which surprise matters more: the one that confirms it, or the one that doesn't? 🤔
#cpi #Inflation #FederalReserve #Macro
$PIEVERSE $EDGE $ONE
Today's Inflation Report Is the Last Big Clue Before the Fed's December Decision
Markets have mostly made up their minds about December. The October CPI, due this morning, is the last chance to change them.
Here's the setup: the Bureau of Labor Statistics releases October CPI at 8:30 a.m. ET, the final reading before the Fed meets on December 8-9. Economists expect headline prices up about 0.3% month over month and core up 0.2%, a cooldown from September's 0.6% and 0.3%, helped by lower gasoline. The Cleveland Fed's nowcast is a little softer. One quirk: because last year's shutdown left October 2025 prices uncollected, the BLS won't publish a 12-month rate, so the monthly core figure will likely drive the reaction. Meanwhile, stronger October payrolls (165,000 jobs, unemployment at 4.1%) pushed futures-implied odds of a December quarter-point hike to roughly 77% to 80%. Several analysts, including Citi and Natixis, say an in-line print wouldn't necessarily stop a hike, and Monex argues a hike is nearly priced unless CPI or the November jobs report on December 4 surprises sharply lower. Risks to core skew higher from shipping costs, tariffs, and airfares, partly offset by softer shelter.
Why does this matter? Rate expectations have been a main driver of risk assets, including crypto, throughout this quarter. A hotter print could harden hike bets, while a softer one may only trim them.
When the market already leans one way, which surprise matters more: the one that confirms it, or the one that doesn't? 🤔
#cpi #Inflation #FederalReserve #Macro
$PIEVERSE $EDGE $ONE
