How Tomorrow's Core CPI Print Could Spook the Market
Tomorrow is the big day when we get the inflation print for December. Whether or not you believe that inflation numbers are real or manipulated, the CPI is nevertheless a closely-watched metric. Investors are anxious to see whether inflation is indeed cooling down from the crazy highs we saw throughout 2022.

Year-over-year (YoY) forecasts peg the CPI to come in at 6.5%, while month-over-month (MoM) forecasts expect an increase of 0.1%. Meanwhile, YoY and MoM core CPI numbers are expected to come in at 5.7% and 0.3%, respectively. However, based on data from the Federal Reserve Bank of Cleveland, we might see a mixed bag tomorrow.

CPI numbers are likely to align with expectations, but the same might not be true for core CPI. As per the image below, the Federal Reserve estimates core CPI to come in at 5.87% YoY and 0.48% MoM.

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Although these estimates aren't significantly higher, in a market environment where investors have become very sensitive to news (both good and bad), the data might just be bad enough to create the uncertainty needed to send stocks lower (assuming the Federal Reserve is correct).

Taken from our free substack, here:
Jensen Butler's avatar
Surely the market will react rationally!
The Hippie Investor's avatar
I can’t imagine being a buyer the last two days without knowing beforehand what CPI would be, yet we had tons of buying by the whales. They must know something. As a retail investor with no insider knowledge I took it as an opportunity to sell some gains.
Nathan Worden's avatar
So far things have been pretty tame! S&P 500 up 0.15% today
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