March Inflation Data Preview: What Figures Would Boost Odds Of June Interest Rate Cut?
Portfolio Pulse from Piero Cingari
The upcoming Consumer Price Index (CPI) report for March is highly anticipated, with economists expecting a slight increase in annual CPI inflation from 3.2% to 3.4%, and a deceleration in monthly CPI inflation to 0.3%. Core CPI inflation is also expected to ease, potentially influencing the Federal Reserve's decision on interest rates. The report's outcome could sway market expectations towards either a rate cut or hold in June. Previous CPI data led to a decline in SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust (QQQ), while iShares 20+ Year Treasury Bond ETF (TLT) weakened.
April 08, 2024 | 8:18 pm
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NEGATIVE IMPACT
Invesco QQQ Trust (QQQ) underperformed, closing 0.8% lower after February's CPI report, highlighting its sensitivity to inflation and interest rate expectations.
QQQ's significant drop in response to the previous CPI data suggests a negative short-term impact if the March report does not align with market expectations for easing inflation.
CONFIDENCE 90
IMPORTANCE 75
RELEVANCE 85
NEGATIVE IMPACT
SPDR S&P 500 ETF Trust (SPY) fell 0.2% following February's CPI report, indicating sensitivity to inflation data and Fed rate decisions.
SPY's previous reaction to CPI data suggests a negative short-term impact on its price if the upcoming report indicates higher-than-expected inflation, potentially delaying Fed rate cuts.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
iShares 20+ Year Treasury Bond ETF (TLT) weakened by 0.5% following the release of February's CPI data, reflecting its reaction to inflation trends and Fed policy outlook.
TLT's decline after the previous CPI report suggests that higher-than-expected inflation figures, which could delay Fed rate cuts, may negatively impact its short-term price.
CONFIDENCE 85
IMPORTANCE 65
RELEVANCE 75