⚠️ CPI TOMORROW: THE NUMBERS TO WATCH 👇 September inflation data drops Wednesday at 8:30 AM ET. Here’s what’s expected and what could move stocks and crypto. Headline forecasts vary slightly by survey. Core excludes food and energy. 🪧 WHY THIS REPORT MATTERS Higher energy prices are expected to push headline inflation higher, while monthly core inflation is expected to slow. That means an increase in annual inflation is already anticipated. A 3.6% headline reading wouldn’t automatically be a bearish surprise. The question is how the actual numbers compare with expectations and whether price pressures are spreading beyond energy. Markets head into the release with the 10-year Treasury yield around 5.2%. Earlier today, traders were pricing less than a 20% chance of an October rate hike, but roughly an 87% chance of a December hike. Tomorrow’s report could shift those expectations. MY READ ON POSSIBLE REACTIONS: • Core at 0.1% or lower: A downside surprise that could ease rate-hike expectations. Falling yields would generally help stocks and crypto. • Core at 0.2%: In line with expectations. Headline inflation and the underlying categories become more important. No automatic green light for a rally. • Core at 0.3%: Above expectations and another month without the expected slowdown. Could lift yields and pressure risk assets. • Core at 0.4% or higher: A larger upside surprise that would strengthen the case for further tightening. These are reaction scenarios, not guaranteed market directions. The combination matters. Hot headline inflation with softer core is a different report from both coming in hot. Keep an eye on the 2-year Treasury yield, the dollar, and whether stocks and $BTC hold their initial move. A rally alongside falling yields would be more consistent with markets pricing a softer rate outlook. Side note: PPI follows Thursday at 8:30 AM ET, so tomorrow isn’t the last inflation catalyst this week.
