US Core CPI comes out at 0.2%, below 0.3% expected. All other inflation figures miss estimates. The US Dollar and yields are down, while Gold and stocks rise ahead of the Fed dot plot. Follow all the developments in the live coverage
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Why CPI inflation matters for markets
CPI is the first “hard data” inflation report, showing how prices developed in the previous months. While there are earlier signs of inflation, these are surveys. Moreover, the report tends to include surprises rocking markets.
The Federal Reserve (Fed) has two mandates: full employment – the Nonfarm Payrolls (NFP) serves as evidence for that – and price stability. In a rare occasion, the US releases CPI on the same day as the Fed decides.
The focus is on the dot-plot, the bank’s projections of growth, employment, inflation, and most importantly interest rates. Investors expect the Fed to project one or two cuts this year, down from three foreseen in the March decision. The Fed dot plot is critical to markets, and it will undergo last-minute changes in response to the CPI inflation report.
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