🔥 𝗧𝗵𝗲 𝗖𝗣𝗜 𝗣𝗮𝗿𝗮𝗱𝗼𝘅: 𝗖𝗮𝗻 𝗖𝗼𝗿𝗲 𝗜𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻 𝗖𝗼𝗼𝗹 𝗪𝗵𝗶𝗹𝗲 𝘁𝗵𝗲 𝗙𝗲𝗱 𝗦𝘁𝗶𝗹𝗹 𝗛𝗶𝗸𝗲𝘀? 𝗡𝗼𝗿𝗱𝗙𝗫
Today’s US CPI could deliver exactly the kind of signal markets hate: 𝗴𝗼𝗼𝗱 𝗻𝗲𝘄𝘀 𝗮𝗻𝗱 𝗯𝗮𝗱 𝗻𝗲𝘄𝘀 𝗮𝘁 𝘁𝗵𝗲 𝘀𝗮𝗺𝗲 𝘁𝗶𝗺𝗲.
📊 Economists expect August headline CPI to rise 𝟬.𝟰% 𝗺/𝗺 𝗮𝗻𝗱 𝟯.𝟰% 𝘆/𝘆.
Core CPI, however, is forecast at only 𝟬.𝟮% 𝗺/𝗺 𝗮𝗻𝗱 𝟮.𝟰% 𝘆/𝘆, down from 2.5% in July.
At first glance, that sounds dovish.
But there is a problem.
🛢️ 𝗢𝗶𝗹 𝗵𝗮𝘀 𝗰𝗵𝗮𝗻𝗴𝗲𝗱 𝘁𝗵𝗲 𝗶𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻 𝘀𝘁𝗼𝗿𝘆.
Brent has surged back above $108/bbl, while yesterday’s US PPI showed producer prices rising 𝟬.𝟰% in August, with energy costs jumping 𝟰.𝟮%.
At the same time, the US 10-year Treasury yield has climbed to around 𝟰.𝟵𝟳%, putting the psychologically important 𝟱% level within reach.
So today’s real question is not simply whether CPI beats or misses expectations.
❓ 𝗪𝗶𝗹𝗹 𝘁𝗵𝗲 𝗙𝗲𝗱 𝗳𝗼𝗰𝘂𝘀 𝗼𝗻 𝗶𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻 𝘁𝗵𝗮𝘁 𝗰𝗼𝗼𝗹𝗲𝗱 𝗶𝗻 𝗔𝘂𝗴𝘂𝘀𝘁, 𝗼𝗿 𝗶𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻 𝘁𝗵𝗮𝘁 $𝟭𝟬𝟬+ 𝗼𝗶𝗹 𝗺𝗮𝘆 𝗰𝗿𝗲𝗮𝘁𝗲 𝗻𝗲𝘅𝘁?
🏦 The Federal Reserve meets on 𝟭𝟱-𝟭𝟲 𝗦𝗲𝗽𝘁𝗲𝗺𝗯𝗲𝗿, and markets currently price roughly a 𝟳𝟬% chance of a 25 bp rate hike.
Three scenarios stand out:
🟢 𝗖𝗼𝗿𝗲 𝗖𝗣𝗜 𝗮𝗿𝗼𝘂𝗻𝗱 𝟬.𝟮% 𝗼𝗿 𝗹𝗼𝘄𝗲𝗿
A softer reading could reduce expectations of an immediate hike. Treasury yields and the dollar could retreat, while gold and equities may get some relief.
🟡 𝗖𝗼𝗿𝗲 𝗖𝗣𝗜 𝗻𝗲𝗮𝗿 𝟬.𝟮%, 𝗯𝘂𝘁 𝗵𝗲𝗮𝗱𝗹𝗶𝗻𝗲 𝗶𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻 𝗿𝗲𝗺𝗮𝗶𝗻𝘀 𝘀𝘁𝗿𝗼𝗻𝗴
The market may quickly look past today’s number and focus instead on oil, energy inflation and what comes next.
🔴 𝗖𝗼𝗿𝗲 𝗖𝗣𝗜 𝗮𝗿𝗼𝘂𝗻𝗱 𝟬.𝟰% 𝗼𝗿 𝗵𝗶𝗴𝗵𝗲𝗿
That would be much harder for the Fed to dismiss. Rate-hike expectations could rise further, the 10-year yield could test 5%, and pressure on gold and risk assets could intensify.
🎯 𝗧𝗵𝗲 𝗽𝗮𝗿𝗮𝗱𝗼𝘅 𝗶𝘀 𝘀𝗶𝗺𝗽𝗹𝗲: 𝗖𝗣𝗜 𝘁𝗲𝗹𝗹𝘀 𝘂𝘀 𝘄𝗵𝗲𝗿𝗲 𝗶𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻 𝘄𝗮𝘀. 𝗢𝗶𝗹 𝗺𝗮𝘆 𝗯𝗲 𝘁𝗲𝗹𝗹𝗶𝗻𝗴 𝘂𝘀 𝘄𝗵𝗲𝗿𝗲 𝗶𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻 𝗶𝘀 𝗴𝗼𝗶𝗻𝗴.
Today, markets must decide which one matters more.
👉 𝗙𝗼𝗹𝗹𝗼𝘄 𝘁𝗵𝗲 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 𝘄𝗶𝘁𝗵 𝗡𝗼𝗿𝗱𝗙𝗫:
https://my.nordfx.com/en/registration?utm_source=social&utm_medium=post&utm_campaign=nordfx
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🔥 𝗧𝗵𝗲 𝗖𝗣𝗜 𝗣𝗮𝗿𝗮𝗱𝗼𝘅: 𝗖𝗮𝗻 𝗖𝗼𝗿𝗲 𝗜𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻 𝗖𝗼𝗼𝗹 𝗪𝗵𝗶𝗹𝗲 𝘁𝗵𝗲… was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.