RATE CUTS ARE CONFIRMED

🚨 BREAKING 🚨 

 🇺🇸 CPI DATA CAME IN AT 2.7%  

EXPECTATIONS: 2.8%

U.S. CPI data has presented a mixed picture, injecting uncertainty into the market. As a result, the yield on 10-year Treasury notes is falling sharply.

Immediate Market News

The recently released U.S. Consumer Price Index (CPI) showed an annual increase of 2.7%, slightly lower than the expected 2.8%. However, the Core CPI increased by 3.1% year-over-year, which was slightly higher than the anticipated 3.0%.

This contradictory data has caused some confusion, but initial market reactions are leaning toward optimism.

The yield on the 10-year U.S. Treasury note is rapidly dropping, from a daily high of 4.31% to 4.235%.

 U.S. stock index futures are climbing quickly.

The U.S. Dollar Index is showing choppy, volatile movement.

My Take

While core CPI was higher than expected, the market seems to be focusing on the overall CPI cooling, hoping it will allow the Federal Reserve to cut interest rates. However, it will take some time for a clear winner to emerge. Based on experience, the market direction will likely become clearer once the U.S. markets open.

I don't believe the overall trend has reversed yet, but I recommend that everyone avoid taking on too much risk.

It's worth noting that the main drivers behind the increase in core CPI were:

* Used car prices

* Housing-related expenses

* Transportation services

* Medical care

This suggests that the probability of core inflation remaining stable and slightly elevated is still quite high.

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