The CPI release didn’t counter existing market narratives
The market views it as keeping the Fed on schedule for June rate cuts: Tom Essaye Quoted in Barron’s
Stocks Are Rallying. Inflation Report Keeps the Fed on Track.
Sevens Report Research’s Tom Essaye told Barron’s in a phone interview that while the headline figure didn’t meet expectations, the numbers didn’t counter existing market narratives.
“People still very much subscribe to the idea that housing is artificially inflating CPI, and that whenever that begins to work its way out of the data, the number will move down even more quickly than it is,” Essaye says. “Nothing in this report refuted that, and so as a result, I think that the market views it as keeping the Fed on schedule for June rate cuts.”
“For now, the script is still in place,” Essaye says. “The issue markets have is that it’s already priced in, so we need to find the next new catalyst.”
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