July CPI Likely To Come 'Hot,' Could Accelerate The AI Bubble Burst

Although markets expected a “mild” CPI print, soft data is raising the odds of a “hot” CPI outcome. That, in turn, could force the Fed to hike in September, with more aggressive tightening already being priced in. Net effect: downside for risk assets via higher-for-longer rate expectations and upward pressure on yields.

Analysis

Although markets expected a “mild” CPI print, soft data is raising the odds of a “hot” CPI outcome. That, in turn, could force the Fed to hike in September, with more aggressive tightening already being priced in. Net effect: downside for risk assets via higher-for-longer rate expectations and upward pressure on yields.