June CPI to Surpass 10%? Any Impacts?

Tiger_comments
2022-07-12

June 2022 CPI data are scheduled to be released on July 13, 2022, at 8:30 A.M. Eastern Time.

The White House expects June’s consumer price index figures to be “highly elevated” as Americans grappled with substantial increases in the cost of gasoline and food, but said the reading was“already out of date” because of falling energy prices.

1. Oil Prices Plunge in June, But Inlfation remains high？

Analysts say energy prices are causing inflation to be expected to be higher, although core CPI excluding food and energy is likely to be lower.

According to FactSet, economists are now forecasting that CPI will increase by 8.8% yoy in June, up from 8.6% in May. Oil prices began to fall in mid-June, so the CPI will increase by as much as 1% in June under the influence of higher energy prices.

Excluding energy and food prices, economists expect the core CPI to increase by 5.7% yoy and 0.5% yoy in June, both down from 6% and 0.6% in May.

2. Possible Influence on Stock Market

1) Bearish

The 8.8% CPI is higher than May's 8.6%, which is bound to trigger renewed speculation that "inflation has not yet peaked. The market may then speculate whether the Fed will raise interest rates more aggressively, such as by 1% instead of 0.75%.

Currently CME's Fedwatch shows that the market believes that the Fed will raise rates by 1% in July with a probability of 9.4%, which will certainly make the broader market decline.

2) Bullish

But on the other hand, the market is forward looking. After the recent sharp price pullback in commodities, particularly oil, the market may believe that while inflation was high in June, it will fall back in July and then rebound sharply.

What's your expectation of June CPI: still around 8% or surpass 10%?

How will market react after CPI releases: rise or fall?

How will Fed respond: 50/75/100bps?

Share your thoughts in the comment section and win tiger coins~

# Macro Trend

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  • LMSunshine
    ·2022-07-12
    (2/3)Market will likely fall after CPI release if June CPI is above 8.6% but will rise if it’s 8.6% or below.The latter will give investors confidence that inflation has peaked & less aggresive hikes
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  • LMSunshine
    ·2022-07-12
    (3/3)The Feds will respond with a 75bps as they are very far from the desirable 2-3% inflation level.Feds will try to avoid a recession if possible,so it’s unlikely that they will raise by 100bps
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  • Bonta
    ·2022-07-12
    Expecting CPI to be 8% or higher as theres no signifcant improvement in supply chain and demand doesnt seem to have significant reduction. Markets likely is finding reason to selloff after rally
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  • HelenJanet
    ·2022-07-12
    I expect the June CPI to be at least 8%, the market will fall after CPI release and Fed will rise interest rate by 75bps. And all my shares in my portfollio will turn to deepest red. [Facepalm][Cry]
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  • BenjiFuji
    ·2022-07-12
    I still think CPI will be >8%. Markets will raise initially with bulls saying it isnt bad. Then a crash by bears will occur. 75 bps unless CPI>8.8%. Stay safe all [Great]
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  • RDPD富爸穷爸
    ·2022-07-12
    Personal view is CPI already peak and is coming down but how the market reacts is anyone guess. Market is expecting 75bps but hopefully FED see some signs of inflation easing and go for 50bps instead.
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    • RDPD富爸穷爸Replying to___ _: 
      Need to contact client service. I got this problem too
      2022-07-12
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    • ___ _: 
      my post keeps getting eaten up [Cry]  donno what to do.  so sad [Sad]
      2022-07-12
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    • ___ _Replying toRDPD富爸穷爸: 
      i think it'll only appear after coins issuance [Cry]
      2022-07-12
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  • kento
    ·2022-07-12
    inflation only goes up, the market is too far gone due to the excessive printing of money by the feds.
    A great reset is abound.
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  • Kaixiang
    ·2022-07-12
    CPI expected to be over 8% as demand and prices remain elevated (esp oil). Not likely to see a spike. Fed may stick to 75bps rate hikes as current inflation is still far from Fed’s target
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  • AliceSam
    ·2022-07-12
    economists are now forecasting that CPI will increase by 8.8% yoy in June, up from 8.6% in May.
    [微笑][微笑]
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  • ___ _
    ·2022-07-12
    June CPI is likely to be 8.7% due to high energy prices. Market may have already adjusted itself prior to the release of data.  FED will do what it seems fit to get inflation under control.
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    • Success88: 
      Thanka for sharing
      2022-07-12
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  • Gxian23
    ·2022-07-12
    Hopefully the CPI has a lower results which signals a lower inflation rate. But doubt that it will brings the market bullish.
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  • Boo2020
    ·2022-07-12
    CPI might stay flat. maybe market will have short rally...
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  • GrumpyDino
    ·2022-07-12
    I think CPI will still remain high as we have felt the rising costs everywhere too. I feel that the Fed will likely push for 75bps still as it has been playing catch up all along in taming inflation.
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  • Success88
    ·2022-07-12
    Although Fed had increase the interest rate but the CPI still far from 2% target. War is still ongoing. Russian Ruble is getting stronger and stronger. Oil price high. CPI data kn Wednesday will be 8%
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    • Success88: 
      Attach image
      2022-07-12
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  • Universe宇宙
    ·2022-07-12
    1. around 8.5% to 8.9%
    2. may rise if <= 8.8%, may fall if >8.8%
    3. need to be at least 75 bps hike.
    4. read my main post for more,  thanks. [Cool]
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  • Brocco
    ·2022-07-12
    Believe inflation is still hot and CPI will remain around last month %. With that market likely to fall if Fed respond witg higher interest hike.
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  • Cris0
    ·2022-07-12
    Expects slighy lower CPI to show inflation has peak and market will raise again with lower interest hike. On a good note dollar trending looking good today.
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  • Tony Stark7
    ·2022-07-12
    Bearish. CPI is expected to be higher than May as Energy and food is still elevated. The Feds will remain at 0.75% for now. Leading up to the CPI with all the uncertainties the market remains bearish.
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  • Derrick3388
    ·2022-07-12

    Hope CPI PPI reach its peak and ease

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  • JL28168
    ·2022-07-12
    if inflation further increase, will be another round of market drop , economy get worst and government struggling to control it, life getting harder, financial of family, individual ,goverment tighten
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