CPI: What Really is At Stake Today
JPM, GS Previews
Housekeeping: Good Morning.
CPI Backdrop
The March Payrolls came in hot and markets rallied anyway.
The previous two CPI reports came in hot and were written off to being seasonal in nature and would return to downward trend in March.
Market Prices at 6:53 AM…
CPI: What Really is At Stake Today
This statement by Goldman Sachs trader encapsulates things quite well coming into today.
"Anything inline or under and its off to the races for a next leg higher in equities, bonds, gold, bitcoin etc ie a continuation of the everything rally. A hot number and it’s risk off given it would be a third hot print in a row and positioning is stretched."
While we are not sure things will play out as their trader says marketwise, we are sure of one thing:
If the inflation comes in hot, there are no more credible excuses for the higher prior inflation prints left. Inflation will be officially back. Inflation will in the least be normalizing between 3% and 4% as the downward impulse from all previous rate hikes has dissipated.
Here are our JPM and GS preview summaries with full reports.