The 3.6% headline worries me more because another acceleration from 3.4% would strengthen the “sticky inflation” narrative and keep pressure on long yields.
But the bigger market-moving risk is a core CPI miss. If core comes in at 0.2% MoM as expected, that would still show some underlying cooling. A surprise back to 0.3% or higher would be much harder for the bond and equity markets to dismiss, especially with valuations already sensitive to higher-for-longer rates.
So: headline 3.6% is the bigger concern, but core above 0.2% is the bigger potential shock.
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