The CPI print came in well below expectations and declined from the prior reading, signaling a continued cooling in inflationary pressures. This strengthens the narrative that Fed tightening is working and reduces the need for prolonged restrictive policy. As a result, expectations for monetary easing in the coming year are reinforced, which is supportive for risk assets, including equities and crypto. That said, short-term market reaction will still depend on bond yields and upcoming Fed communication.
Outlook: Today’s CPI is risk-on supportive, but not yet sufficient to confirm an aggressive easing cycle without further confirmation from labor and growth data.
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🇬🇧 U.S. CPI Analysis (YoY)
Actual: 2.7%
Forecast: 3.1% | Previous: 3.0%
The CPI print came in well below expectations and declined from the prior reading, signaling a continued cooling in inflationary pressures. This strengthens the narrative that Fed tightening is working and reduces the need for prolonged restrictive policy.
As a result, expectations for monetary easing in the coming year are reinforced, which is supportive for risk assets, including equities and crypto. That said, short-term market reaction will still depend on bond yields and upcoming Fed communication.
Outlook:
Today’s CPI is risk-on supportive, but not yet sufficient to confirm an aggressive easing cycle without further confirmation from labor and growth data.