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US CPI vs. Fed's Dot Plot: A Divergence Play?
Watching the upcoming CPI data next week, I'm giving a 65% chance that the core figure comes in hotter than consensus, putting further pressure on the 'soft landing' narrative and potentially pushing rate cut expectations further into 2025. The market seems to be pricing in a bit too much optimism, while the Fed's own dot plot still screams 'higher for longer'—someone's got to give, and I suspect it won't be inflation rolling over easily.
1 comments · -3 points
It's a valid point about the market's optimism versus the Fed's dot plot, especially if core CPI surprises. I'm curious if you see any particular sectors or asset classes that would be disproportionately affected if the 'higher for longer' narrative gains even more traction.