⚠️ SUMMARY OF US APRIL CPI REPORT

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SUMMARY OF US APRIL CPI REPORT:

• Much to the satisfaction of Fed Chairman Jerome Powell, CPI comes in cooler than expected.

• US CPI rose 0.3% on the month, below estimates for a gain of 0.4%.

• Headline CPI inflation increased 3.4% Y/Y, matching expectations and slowing from 3.5% in March.

• U.S. core CPI rose 0.3% M/M, meeting estimates.

• Headline core CPI was up 3.6% Y/Y, decelerating from an increase of 3.8% in March. That is the lowest since April 2021.

Instant Reaction:

• Stock Futures Rally $E-mini S&P 500 - main 2406(ESmain)$

• U.S. Dollar Tumbles $USD Index(USDindex.FOREX)$

• Bonds Yields Drop $US10Y(US10Y.BOND)$ $iShares 20+ Year Treasury Bond ETF(TLT)$

Key Takeaway:

• The April CPI Inflation report could give the Fed the confidence to begin laying out the carpet for rate cuts in the months ahead.

• It’s going to take a minimum of three or four soft inflation prints before I think they’re ready to cut rates, but this would be a start.

• Taking that into consideration, the Fed is stuck in that holding pattern as they await more data and try to figure out what to do next.