CPI REPORT IS COMING: Do This Before Market Open!
In a Nutshell
Markets are likely to react sharply to tomorrow's CPI release, with a 67% probability of a Fed rate hike priced in. Traders should avoid overleveraging ahead of the report and maintain cash to buy potential dips, especially if CPI comes in as expected or better. The 700 level on major indices remains critical support, while rising Treasury yields near 5% are already pressuring housing and corporate borrowing costs.
These notes were generated by AI and may contain inaccuracies.
The CPI data report will be released tomorrow at 1 hour before markets open, providing insight into whether the Federal Reserve will raise interest rates or continue to pause at their September 16th meeting. According to the Federal Rate Monitor tool, there is currently a 66.7% probability the Federal Reserve will implement a rate hike and a 33.3% probability they will pause.
The CPI report is released at blss.gov/cpi. This is the official website of the US Bureau of Labor Statistics where the report is published. Users should update this page, click on the PDF, and refresh if necessary to access the latest data for August.
The overall CPI expectation is 3.4% versus the current rate of 3.4%, indicating analysts expect no change. For core CPI (all items less food and energy), expectations are for a decline from 2.5% to 2.4%. Overall CPI has been trending down from highs of 4.2%, while core CPI has decreased from highs around 2.9% to the current 2.5%.
The key principle for handling major economic reports is to avoid being overleveraged. While investors should not be scared to remain invested, they should not put themselves in positions they cannot tolerate. Long-term positions in quality companies should be maintained through dollar cost averaging, and investors should keep cash on the sidelines to take advantage of potential dip buying opportunities.
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