April 12, 2023
Good morning,
This is the big day of the week for market participants; a key inflation data point, the Consumer Price Index (CPI), comes out at 8:30 ET, and the minutes from the last Fed meeting will be disseminated this afternoon. Today will likely go a ways towards dictating which way the Fed moves in three weeks at its next meeting (5/2). As of last night, markets are pricing a nearly 75% chance of a hike next month. A CPI number above expectations will likely push pricing towards near certainty. A lower-than-expected CPI should push pricing back towards unchanged, where it was before last week’s employment data. And if CPI comes in spot-on expectations, we’ll probably have to wait for this afternoon’s minutes as they may well tip the balance should pricing be muddled after the inflation report (CPI).
See you Friday, and hopefully with a better handle on the market’s message following today’s macro data.
Be well,
Mike