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Core Inflation Rate YoY: Consensus 3.0%, Actual 2.8%
Inflation Rate MoM: Consensus 0.1%, Actual -0.1%
Inflation Rate YoY: Consensus 2.6%, Actual 2.4%
This is a hugely soft report (much lower inflation numbers). This shows that the Fed's holding rates higher was working and inflation was coming down. Of course, this is older data, and we've had the tariff situation in the meantime. But long-term, this suggests inflation isn't the issue really. We now need to see what effect tariffs have.
Short-term: A minor rally off the back of the data, but it's retracing slightly, suggesting that the FED are probably just still on pause until we see the follow-through effects of these tariffs. However, there should be a big emphasis on that, which should be positive for risk assets.
Market reaction since: Small move up, the follow-through isn't convincing as of yet, but let's see how it finishes today.
How to position: We have remaining patients for now in cash mostly, and we'll be looking to build positions over the coming weeks/months.
Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.
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