Trump’s First Consumer Price Index Report Set for Release Wednesday
The upcoming consumer price index (CPI) report is expected to show a decline in inflation, indicating potential interest-rate cuts which could positively affect risk assets. Key forecasts include:
- Headline inflation projected to drop to 2.9% from 3%
- Core inflation anticipated to decrease to 3.2% from 3.3%
Recent market performance includes a nearly 10% drop in the S&P 500 and a 30% decline in bitcoin, now around $80,000. The 10-year Treasury yield has fallen to 4.2%, supporting lower federal funds rates.
The Truflation Index stands at 1.35%, the lowest since September 2020, but long-term inflation expectations remain above 2%. At the FOMC meeting on March 18-19, the federal funds rate is expected to stay between 4.25%-4.50%. Investors will monitor the CPI report closely; a lower-than-expected figure may lead to rate cuts, while a higher reading could maintain elevated rates, impacting risk assets negatively.